Xcel Brands Inc (NASDAQ:XELB), a media company based in United States, saw significant share price volatility over the past couple of months on the NasdaqGM, rising to the highs of $3.45 and falling to the lows of $2.25. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Xcel Brands’s current trading price of $2.25 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Xcel Brands’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View out our latest analysis for Xcel Brands
Is Xcel Brands still cheap?
Good news, investors! Xcel Brands is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $6.91, but it is currently trading at US$2.25 on the share market, meaning that there is still an opportunity to buy now. Xcel Brands’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 Xcel Brands look like?
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 a relatively muted revenue growth of 8.25% expected in the upcoming year, short term growth doesn’t seem like a key driver for a buy decision for Xcel Brands.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since XELB is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on XELB for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy XELB. 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Xcel Brands. You can find everything you need to know about Xcel Brands in the latest infographic research report. If you are no longer interested in Xcel Brands, 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.