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When Should You Buy Hooker Furniture Corporation (NASDAQ:HOFT)?

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Hooker Furniture Corporation (NASDAQ:HOFT), 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. Less-covered, small caps 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 the stock still be trading at a low price relative to its actual value? Let’s take a look at Hooker Furniture’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Hooker Furniture

What's the opportunity in Hooker Furniture?

According to my valuation model, Hooker Furniture seems to be fairly priced at around 1.8% below my intrinsic value, which means if you buy Hooker Furniture today, you’d be paying a fair price for it. And if you believe that the stock is really worth $34.64, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Hooker Furniture’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Hooker Furniture?

earnings-and-revenue-growth
earnings-and-revenue-growth

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. Hooker Furniture's revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? HOFT’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on HOFT, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Hooker Furniture, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Hooker Furniture has 2 warning signs and it would be unwise to ignore these.

If you are no longer interested in Hooker Furniture, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

This article by Simply Wall St is general in nature. 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.

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