Let’s talk about the popular Scripps Networks Interactive Inc (NASDAQ:SNI). The company’s shares had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of $81.37 to $88.77. However, is this the true valuation level of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Scripps Networks Interactive’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for Scripps Networks Interactive
What’s the opportunity in Scripps Networks Interactive?
According to my valuation model, Scripps Networks Interactive seems to be fairly priced at around 19.14% below my intrinsic value, which means if you buy Scripps Networks Interactive today, you’d be paying a fair price for it. And if you believe that the stock is really worth $108.52, then there isn’t much room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Scripps Networks Interactive’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Scripps Networks Interactive generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. With profit expected to grow by 39.00% over the next couple of years, the future seems bright for Scripps Networks Interactive. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has already priced in SNI’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. 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 an eye on SNI, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Scripps Networks Interactive. You can find everything you need to know about Scripps Networks Interactive in the latest infographic research report. If you are no longer interested in Scripps Networks Interactive, 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.