Is It Too Late To Consider Buying Monro, Inc. (NASDAQ:MNRO)?
While Monro, Inc. (NASDAQ:MNRO) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$49.18 at one point, and dropping to the lows of US$43.28. 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 Monro's current trading price of US$45.67 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 Monro’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Monro
Is Monro Still Cheap?
Great news for investors – Monro is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $71.21, but it is currently trading at US$45.67 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Monro’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Monro?
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. Though in the case of Monro, it is expected to deliver a relatively unexciting earnings growth of 9.0%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Monro, at least in the near term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since MNRO is currently undervalued, it may be a great time to increase your holdings in the stock. 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 MNRO for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MNRO. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example - Monro has 1 warning sign we think you should be aware of.
If you are no longer interested in Monro, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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