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Let's talk about the popular Hasbro, Inc. (NASDAQ:HAS). The company's shares led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. As a large-cap stock with high coverage 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? Today I will analyse the most recent data on Hasbro’s outlook and valuation to see if the opportunity still exists.
Is Hasbro still cheap?
According to my valuation model, Hasbro seems to be fairly priced at around 5.55% above my intrinsic value, which means if you buy Hasbro today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $89.52, there’s only an insignificant downside when the price falls to its real value. Furthermore, Hasbro’s low beta implies that the stock is less volatile than the wider market.
What kind of growth will Hasbro 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. Hasbro's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger 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 HAS’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 financial strength of the company. 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 an eye on HAS, 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 want to dive deeper into Hasbro, you'd also look into what risks it is currently facing. For instance, we've identified 3 warning signs for Hasbro (1 is a bit concerning) you should be familiar with.
If you are no longer interested in Hasbro, 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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