Shares of footwear, apparel, and accessories retailer Genesco (GCO, Financial) experienced a significant decline, falling 11.69% post the release of their second-quarter earnings results. Management pointed to macroeconomic uncertainties and a challenging operating environment, which led to disappointing guidance and a projected revenue decline for the upcoming year.
Genesco's (GCO, Financial) stock currently trades at $26.05. The company's market capitalization is $302.87 million, reflecting the impact of recent challenges. The GF Value for Genesco is estimated at $52.70, indicating that the stock is significantly undervalued relative to its intrinsic value. For more details, you can check the GF Value page for Genesco.
Despite the negative earnings report, Genesco (GCO, Financial) has several warning signs that potential investors should consider. The company has three medium warning signs including a grey Altman Z-Score of 2.45, indicating some financial stress, and recorded a loss in operating income at least once over the past three years. Additionally, there's a severe warning sign due to ongoing issuance of new debt, amounting to $16.71 million over the past three years.
However, not all is bleak for Genesco (GCO, Financial). The company's Beneish M-Score of -2.99 suggests that it is unlikely to be a manipulator, which can provide a ray of optimism to investors. Furthermore, Genesco boasts a price-to-book ratio of 0.55, indicating that the stock is trading below its book value, which might appeal to value investors.
Genesco's (GCO, Financial) financial metrics reveal a mixed picture. The company's revenue growth over the past year stands at 9.3%, but its EBITDA growth has seen a steep decline of 68.5%. The stock's profitability metrics also show weaknesses, with return on equity (ROE) at -4.02%, return on assets (ROA) at -1.56%, and an EBITDA margin of just 1.23%.
The company's liquidity and solvency metrics are not particularly strong either. Genesco (GCO, Financial) has a current ratio of 1.65 and a quick ratio of 0.37, indicating limited short-term financial flexibility. Its long-term debt-to-equity ratio is 0.97, reflecting a relatively high leverage position.
Overall, while Genesco (GCO, Financial) is facing significant challenges, its current stock price suggests it may be undervalued. Investors should weigh the risks highlighted by recent performance metrics and warning signs against the potential long-term value indicated by the GF Value analysis before making any investment decisions.
