CROX vs. RVLV: Which Stock Is the Better Value Option?

Zacks
04-14

Investors looking for stocks in the Textile - Apparel sector might want to consider either Crocs (CROX) or Revolve Group (RVLV). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Crocs and Revolve Group are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CROX is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

CROX currently has a forward P/E ratio of 7.01, while RVLV has a forward P/E of 28.91. We also note that CROX has a PEG ratio of 1.53. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. RVLV currently has a PEG ratio of 1.62.

Another notable valuation metric for CROX is its P/B ratio of 2.94. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, RVLV has a P/B of 3.24.

These metrics, and several others, help CROX earn a Value grade of A, while RVLV has been given a Value grade of D.

CROX stands above RVLV thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CROX is the superior value option right now.

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Crocs, Inc. (CROX) : Free Stock Analysis Report

Revolve Group, Inc. (RVLV) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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