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Is Shoe Carnival (SCVL) Stock Undervalued Right Now?

Zacks Equity Research

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is Shoe Carnival (SCVL). SCVL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 9.40, while its industry has an average P/E of 12.27. Over the last 12 months, SCVL's Forward P/E has been as high as 19.59 and as low as 9.13, with a median of 14.63.

We should also highlight that SCVL has a P/B ratio of 1.36. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.77. Over the past year, SCVL's P/B has been as high as 2.28 and as low as 1.32, with a median of 1.83.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SCVL has a P/S ratio of 0.39. This compares to its industry's average P/S of 0.43.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Shoe Carnival is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SCVL feels like a great value stock at the moment.


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