Bloomin' Brands, Inc. (NASDAQ:BLMN), is not the largest company out there, but it saw a decent share price growth in the teens level on the NASDAQGS over the last few months. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Bloomin' Brands’s outlook and valuation to see if the opportunity still exists.
Is Bloomin' Brands Still Cheap?
Good news, investors! Bloomin' Brands is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $39.60, but it is currently trading at US$27.85 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Bloomin' Brands’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What kind of growth will Bloomin' Brands generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Bloomin' Brands, it is expected to deliver a relatively unexciting earnings growth of 5.9%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Bloomin' Brands, at least in the near term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since BLMN is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on BLMN for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy BLMN. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
If you'd like to know more about Bloomin' Brands as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 2 warning signs for Bloomin' Brands you should be aware of.
If you are no longer interested in Bloomin' Brands, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.