Is It Time To Buy Franklin Covey Co (FC)?
Franklin Covey Co (NYSE:FC), a professional services company based in United States, received a lot of attention from a substantial price movement on the NYSE in the over the last few months, increasing to $20.6 at one point, and dropping to the lows of $17.75. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether FC’s current trading price of $18.7 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 FC’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for Franklin Covey
Is FC still cheap?
According to my valuation model, FC seems to be fairly priced at around 18% below my intrinsic value, which means if you buy FC today, you’d be paying a reasonable price for it. And if you believe that FC is really worth $22.91, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, it seems like FC’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because FC’s stock is less volatile than the wider market given its low beta.
What kind of growth will FC generate?
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 revenues expected to grow by a double-digit 26.11% over the next couple of years, the outlook is positive for FC. If the level of expenses is able to be maintained, it looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has already priced in FC’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 FC? 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 tabs on FC, 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 FC, 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 Franklin Covey. You can find everything you need to know about FC in the latest infographic research report. If you are no longer interested in Franklin Covey, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
