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Is Genesco (GCO) a Great Value Stock Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Genesco (GCO - Free Report) is a stock many investors are watching right now. GCO is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 11.51 right now. For comparison, its industry sports an average P/E of 12.56. Over the past year, GCO's Forward P/E has been as high as 15.07 and as low as 11.08, with a median of 12.47.

Another valuation metric that we should highlight is GCO's P/B ratio of 1.15. 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 stock's P/B looks solid versus its industry's average P/B of 2.85. Over the past year, GCO's P/B has been as high as 1.33 and as low as 0.91, with a median of 1.12.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GCO has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.42.

These are only a few of the key metrics included in Genesco's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, GCO looks like an impressive value stock at the moment.


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