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At US$34.57, Is Hilton Grand Vacations Inc. (NYSE:HGV) Worth Looking At Closely?

Simply Wall St

Hilton Grand Vacations Inc. (NYSE:HGV), which is in the hospitality business, and is based in United States, received a lot of attention from a substantial price increase on the NYSE over the last few months. As a mid-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? Let’s take a look at Hilton Grand Vacations’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Hilton Grand Vacations

What's the opportunity in Hilton Grand Vacations?

Good news, investors! Hilton Grand Vacations is still a bargain right now. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 12.79x is currently well-below the industry average of 22.47x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Hilton Grand Vacations’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Hilton Grand Vacations?

NYSE:HGV Past and Future Earnings, October 15th 2019

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 Hilton Grand Vacations, it is expected to deliver a relatively unexciting earnings growth of 0.009%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since HGV is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on HGV 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 HGV. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Hilton Grand Vacations. You can find everything you need to know about Hilton Grand Vacations in the latest infographic research report. If you are no longer interested in Hilton Grand Vacations, 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 editorial-team@simplywallst.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.