Investors with an interest in Retail - Miscellaneous stocks have likely encountered both Arhaus, Inc. (ARHS) and SharkNinja, Inc. (SN). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Arhaus, Inc. and SharkNinja, Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ARHS has an improving earnings outlook. However, value investors will care about much more than just this.

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.

ARHS currently has a forward P/E ratio of 17.53, while SN has a forward P/E of 21.08. We also note that ARHS has a PEG ratio of 1.39. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SN currently has a PEG ratio of 2.02.

Another notable valuation metric for ARHS is its P/B ratio of 3.83. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, SN has a P/B of 7.48.

These are just a few of the metrics contributing to ARHS's Value grade of A and SN's Value grade of D.

ARHS has seen stronger estimate revision activity and sports more attractive valuation metrics than SN, so it seems like value investors will conclude that ARHS is the superior option right now.

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

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