Should Value Investors Buy Genesco (GCO) Stock?

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Genesco (GCO) is a stock many investors are watching right now. GCO is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 16.91, which compares to its industry's average of 18.69. Over the past year, GCO's Forward P/E has been as high as 42.65 and as low as 8.43, with a median of 15.89.

Finally, we should also recognize that GCO has a P/CF ratio of 11.89. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 17.84. Over the past year, GCO's P/CF has been as high as 17.26 and as low as 5.49, with a median of 7.39.

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

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