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While The Hain Celestial Group, Inc. (NASDAQ:HAIN) might not be the most widely known stock at the moment, it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. As a well-established company, which tends to be well-covered by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Hain Celestial Group’s outlook and value based on the most recent financial data to see if the opportunity still exists.
What is Hain Celestial Group worth?
According to my valuation model, Hain Celestial Group seems to be fairly priced at around 17% below my intrinsic value, which means if you buy Hain Celestial Group today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $49.44, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Hain Celestial Group’s low beta implies that the stock is less volatile than the wider market.
What does the future of Hain Celestial Group 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. However, with an expected decline of -4.6% in revenues over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Hain Celestial Group. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Currently, HAIN 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 optimal 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 HAIN 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. In addition to this, 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 HAIN should the price fluctuate below its true value.
If you want to dive deeper into Hain Celestial Group, you'd also look into what risks it is currently facing. To help with this, we've discovered 2 warning signs (1 can't be ignored!) that you ought to be aware of before buying any shares in Hain Celestial Group.
If you are no longer interested in Hain Celestial Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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. 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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