U.S. Markets closed
  • S&P Futures

    3,849.75
    +15.50 (+0.40%)
     
  • Dow Futures

    30,998.00
    +89.00 (+0.29%)
     
  • Nasdaq Futures

    13,455.75
    +94.25 (+0.71%)
     
  • Russell 2000 Futures

    2,172.10
    +8.10 (+0.37%)
     
  • Crude Oil

    52.20
    -0.07 (-0.13%)
     
  • Gold

    1,854.50
    -1.70 (-0.09%)
     
  • Silver

    25.67
    +0.11 (+0.43%)
     
  • EUR/USD

    1.2177
    +0.0003 (+0.0244%)
     
  • 10-Yr Bond

    1.0910
    -0.0180 (-1.62%)
     
  • Vix

    21.91
    +0.59 (+2.77%)
     
  • GBP/USD

    1.3695
    +0.0011 (+0.0822%)
     
  • USD/JPY

    103.7740
    +0.0130 (+0.0125%)
     
  • BTC-USD

    32,726.02
    -63.30 (-0.19%)
     
  • CMC Crypto 200

    668.65
    +58.66 (+9.62%)
     
  • FTSE 100

    6,695.07
    -20.35 (-0.30%)
     
  • Nikkei 225

    28,750.11
    +118.66 (+0.41%)
     

Is Now The Time To Look At Buying The Chefs' Warehouse, Inc. (NASDAQ:CHEF)?

Simply Wall St

The Chefs' Warehouse, Inc. (NASDAQ:CHEF), which is in the consumer retailing business, and is based in United States, saw a significant share price rise of over 20% in the past couple of months on the NASDAQGS. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on Chefs' Warehouse’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Chefs' Warehouse

What's the opportunity in Chefs' Warehouse?

Good news, investors! Chefs' Warehouse is still a bargain right now. According to my valuation, the intrinsic value for the stock is $49.56, but it is currently trading at US$38.36 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Chefs' Warehouse’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

Can we expect growth from Chefs' Warehouse?

NasdaqGS:CHEF Past and Future Earnings, August 27th 2019
NasdaqGS:CHEF Past and Future Earnings, August 27th 2019

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 more than double over the next couple of years, the future seems bright for Chefs' Warehouse. 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? Since CHEF is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. 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 CHEF for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CHEF. 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.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Chefs' Warehouse. You can find everything you need to know about Chefs' Warehouse in the latest infographic research report. If you are no longer interested in Chefs' Warehouse, 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.