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Should You Investigate Columbia Sportswear Company (NASDAQ:COLM) At US$77.25?

While Columbia Sportswear Company (NASDAQ:COLM) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$96.95 at one point, and dropping to the lows of US$72.56. 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 Columbia Sportswear's current trading price of US$77.25 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Columbia Sportswear’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 Columbia Sportswear

What's the opportunity in Columbia Sportswear?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 11.50% above my intrinsic value, which means if you buy Columbia Sportswear today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $69.28, there’s only an insignificant downside when the price falls to its real value. In addition to this, Columbia Sportswear has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Columbia Sportswear generate?

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. Columbia Sportswear's earnings over the next few years are expected to increase by 27%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has already priced in COLM’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 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 COLM, 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.

If you'd like to know more about Columbia Sportswear as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Columbia Sportswear has 2 warning signs and it would be unwise to ignore them.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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