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CHS vs. GOOS: Which Stock Should Value Investors Buy Now?

Zacks

Investors interested in Retail – Apparel and Shoes stocks are likely familiar with Chico’s FAS (CHS) and Canada Goose (GOOS). But which of these two stocks presents investors with the better value opportunity right now? Let’s take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Chico’s FAS has a Zacks Rank of #2 (Buy), while Canada Goose has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CHS has an improving earnings outlook. But this is just one factor that value investors are interested in.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.

CHS currently has a forward P/E ratio of 22.33, while GOOS has a forward P/E of 61.30. We also note that CHS has a PEG ratio of 1.49. 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. GOOS currently has a PEG ratio of 1.96.

Another notable valuation metric for CHS is its P/B ratio of 1.11. The P/B ratio pits a stock’s market value against its book value, which is defined as total assets minus total liabilities. For comparison, GOOS has a P/B of 29.29.

Based on these metrics and many more, CHS holds a Value grade of A, while GOOS has a Value grade of D.

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


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