Send me real-time posts from this site at my email

WSM vs. LOVE: Which Stock Should Value Investors Buy Now?

Investors interested in Retail - Home Furnishings stocks are likely familiar with Williams-Sonoma (WSM) and Lovesac (LOVE). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Williams-Sonoma has a Zacks Rank of #1 (Strong Buy), while Lovesac has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that WSM likely has seen a stronger improvement to its earnings outlook than LOVE has recently. But this is only part of the picture for value investors.

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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

WSM currently has a forward P/E ratio of 17.76, while LOVE has a forward P/E of 181.20. We also note that WSM has a PEG ratio of 2.11. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. LOVE currently has a PEG ratio of 5.18.

Another notable valuation metric for WSM is its P/B ratio of 8.13. 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, LOVE has a P/B of 9.86.

Based on these metrics and many more, WSM holds a Value grade of B, while LOVE has a Value grade of D.

WSM sticks out from LOVE in both our Zacks Rank and Style Scores models, so value investors will likely feel that WSM is the better option right now.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
WilliamsSonoma, Inc. (WSM): Free Stock Analysis Report
 
The Lovesac Company (LOVE): Free Stock Analysis Report
 
To read this article on Zacks.com click here.

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue