1-800-FLOWERSCOM Inc (NASDAQ:FLWS), a online retail company based in United States, saw a decent share price growth in the teens level on the NasdaqGS over the last few months. As a 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? Let’s examine 1-800-FLOWERS.COM’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Is 1-800-FLOWERS.COM still cheap?
Great news for investors – 1-800-FLOWERS.COM is still trading at a fairly cheap price. In this instance, I’ve used the price-to-equity (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that 1-800-FLOWERS.COM’s ratio of 16.43x is below its peer average of 32.85x, which suggests the stock is undervalued compared to the Online Retail industry. However, given that 1-800-FLOWERS.COM’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will 1-800-FLOWERS.COM generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for 1-800-FLOWERS.COM, at least in the near future.
What this means for you:
Are you a shareholder? Although FLWS is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to FLWS, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on FLWS for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on 1-800-FLOWERS.COM. You can find everything you need to know about 1-800-FLOWERS.COM in the latest infographic research report. If you are no longer interested in 1-800-FLOWERS.COM, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.