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Are Investors Undervaluing Shoe Carnival (SCVL) Right Now?

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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.

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

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Shoe Carnival (SCVL - Free Report) . SCVL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 14.27, which compares to its industry's average of 14.98. SCVL's Forward P/E has been as high as 15.51 and as low as 6.32, with a median of 11.32, all within the past year.

Another valuation metric that we should highlight is SCVL's P/B ratio of 1.85. 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 4.50. SCVL's P/B has been as high as 1.99 and as low as 1.03, with a median of 1.48, over the past year.

Finally, we should also recognize that SCVL has a P/CF ratio of 10.75. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 14.81. Over the past year, SCVL's P/CF has been as high as 11.61 and as low as 4.91, with a median of 8.54.

These are only a few of the key metrics included in Shoe Carnival'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, SCVL looks like an impressive value stock at the moment.


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