National Beverage Corp. (NASDAQ:FIZZ), which is in the beverage business, and is based in United States, received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to $49.57 at one point, and dropping to the lows of $39.89. 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 National Beverage's current trading price of $40.9 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 National Beverage’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is National Beverage worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 19.98% above my intrinsic value, which means if you buy National Beverage today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $34.09, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that National Beverage’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will National Beverage generate?
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 an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for National Beverage, at least in the near future.
What this means for you:
Are you a shareholder? Currently, FIZZ appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on FIZZ for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on FIZZ should the price fluctuate below its true value.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on National Beverage. You can find everything you need to know about National Beverage in the latest infographic research report. If you are no longer interested in National Beverage, 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 email@example.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.