Should You Investigate The Aaron's Company, Inc. (NYSE:AAN) At US$8.89?
The Aaron's Company, Inc. (NYSE:AAN), is not the largest company out there, but it saw significant share price movement during recent months on the NYSE, rising to highs of US$16.04 and falling to the lows of US$8.89. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Aaron's Company's current trading price of US$8.89 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 Aaron's Company’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 Aaron's Company
What's The Opportunity In Aaron's Company?
Good news, investors! Aaron's Company is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $14.01, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Aaron's Company’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Aaron's Company look like?
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. Though in the case of Aaron's Company, it is expected to deliver a relatively unexciting top-line growth of 7.8% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since AAN 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 AAN for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy AAN. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.
If you'd like to know more about Aaron's Company as a business, it's important to be aware of any risks it's facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Aaron's Company.
If you are no longer interested in Aaron's Company, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
