Should Value Investors Buy Genesco (GCO) Stock?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Genesco (GCO). GCO is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 7.96 right now. For comparison, its industry sports an average P/E of 15.64. GCO's Forward P/E has been as high as 10.35 and as low as 3.12, with a median of 7.07, all within the past year.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. GCO has a P/S ratio of 0.2. This compares to its industry's average P/S of 0.45.
Finally, we should also recognize that GCO has a P/CF ratio of 4.48. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. GCO's P/CF compares to its industry's average P/CF of 14.23. Within the past 12 months, GCO's P/CF has been as high as 5.32 and as low as 2.31, with a median of 3.97.
These are just a handful of the figures considered in Genesco's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GCO is an impressive value stock right now.
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Genesco Inc. (GCO) : Free Stock Analysis Report
