Bravo Brio Restaurant Group Inc (NASDAQ:BBRG), a hotels, restaurants and leisure company based in United States, received a lot of attention from a substantial price increase on the NasdaqGS in the over the last few months. Less covered, small-stocks like BBRG sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could BBRG still be trading at a low price relative to its actual value? Let’s examine BBRG’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. Check out our latest analysis for Bravo Brio Restaurant Group
What is BBRG worth?
Great news for investors – BBRG is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $6.11, but it is currently trading at $2.35 on the share market, meaning that there is still an opportunity to buy now. BBRG’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What does the future of BBRG look like?
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. However, with an expected decline of -3.81% in revenues over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for BBRG. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Although BBRG 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 BBRG, 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 tabs on BBRG for some time, 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 Bravo Brio Restaurant Group. You can find everything you need to know about BBRG in the latest infographic research report. If you are no longer interested in Bravo Brio Restaurant Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass 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.