Men's Wearhouse (NYSE:TLRD) won its battle of who gets to acquire whom, but that doesn't necessarily make the stock a buy. In the coming weeks, the men's suit and formalwear giant will complete its purchase of rival Jos. A. Bank (UNKNOWN:JOSB.DL), and recent earnings from the formerly embattled company look strong. The combined businesses will have unprecedented market share and will certainly grow in the coming periods, but the market has a sharp premium on the stock. Before you get too excited about the new look of Men's Wearhouse, remember the value received for the price paid.

Growing but worth it?
Men's Wearhouse is trading up nearly 50% over the past 12 months, and it's easy to understand the market's reasoning (a loose term) -- the successful buyout of Jos. A. Bank and a recovering business after the ouster of Founder and Chairman George Zimmer. In its recently ended quarter, the company posted a 6.2% increase in earnings and a healthy 2.9% bump in same-store sales.

To its credit, Men's Wearhouse has made some smart moves amid a treacherous apparel-retailing environment. The company agreed to shed its K&G property -- a large-format store selling discounted apparel and accessories -- as it had long been a drag on profitability. Zimmer had pushed back on the K&G sale. While the sale hasn't happened yet, it needs to -- same-store sales were down more than 5% in the just-ended quarter.

The Jos. A. Bank deal makes sense as well. For $1.8 billion in cash, the company becomes by far the biggest in a highly fractured industry with an estimated $3.5 billion in annual sales and nearly 2,000 stores. The deal is expected to create synergies north of $100 million over the next three years.

Still, the industry is relatively mature, with the exception of the highly fractured tuxedo rental business, which has the potential to lead the company forward on sales and earnings growth. How much can Men's Wearhouse grow that hasn't already been priced into the stock? At 19 times forward expected earnings, this is one of the more expensive apparel retailers available to investors. Even the formerly high-flying Michael Kors now trades at the same level, yet with much more potential for continued international growth.

To justify its current price, Men's Wearhouse needs to see a substantial increase in earnings growth, beyond the Jos. A. Bank acquisition. It's not that the company can't achieve these lofty goals -- management has proven itself plenty adept. It's more a matter of market mania. The stock simply doesn't hold downside protection for the price-conscious investor. If value is anywhere near the top of your investment criteria, look elsewhere.

Michael Lewis has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Michael Kors Holdings. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.