ACI vs. PRPL: Which Stock Is the Better Value Option?
Investors looking for stocks in the Consumer Products - Staples sector might want to consider either Albertsons Companies, Inc. (ACI) or Purple Innovation (PRPL). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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.
Right now, Albertsons Companies, Inc. is sporting a Zacks Rank of #2 (Buy), while Purple Innovation has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ACI is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
ACI currently has a forward P/E ratio of 5.28, while PRPL has a forward P/E of 36.81. We also note that ACI has a PEG ratio of 0.44. 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. PRPL currently has a PEG ratio of 2.45.
Another notable valuation metric for ACI is its P/B ratio of 5.67. 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, PRPL has a P/B of 46.85.
Based on these metrics and many more, ACI holds a Value grade of A, while PRPL has a Value grade of D.
ACI stands above PRPL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ACI is the superior value option right now.
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Albertsons Companies, Inc. (ACI) : Free Stock Analysis Report
PURPLE INNOVATION, INC. (PRPL) : Free Stock Analysis Report
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