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Is G-III Apparel Group, Ltd. (NASDAQ:GIII) Potentially Undervalued?

Simply Wall St

G-III Apparel Group, Ltd. (NASDAQ:GIII), which is in the luxury business, and is based in United States, received a lot of attention from a substantial price increase on the NASDAQGS over the last few months. As a mid-cap 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 G-III Apparel Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for G-III Apparel Group

What's the opportunity in G-III Apparel Group?

According to my valuation model, G-III Apparel Group seems to be fairly priced at around 14.15% above my intrinsic value, which means if you buy G-III Apparel Group today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $36.99, there’s only an insignificant downside when the price falls to its real value. In addition to this, G-III Apparel Group has a low beta, which suggests its share price is less volatile than the wider market.

What does the future of G-III Apparel Group look like?

NasdaqGS:GIII Past and Future Earnings, April 23rd 2019

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. With profit expected to grow by 51% over the next couple of years, the future seems bright for G-III Apparel Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? GIII’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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on GIII, now may not be the most optimal 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 G-III Apparel Group. You can find everything you need to know about G-III Apparel Group in the latest infographic research report. If you are no longer interested in G-III Apparel Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.