At US$34.60, Is It Time To Put The Buckle, Inc. (NYSE:BKE) On Your Watch List?
The Buckle, Inc. (NYSE:BKE), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Buckle’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Check out our latest analysis for Buckle
What's The Opportunity In Buckle?
Good news, investors! Buckle is still a bargain right now. According to my valuation, the intrinsic value for the stock is $49.37, but it is currently trading at US$34.60 on the share market, meaning that there is still an opportunity to buy now. Buckle’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
Can we expect growth from Buckle?
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. However, with a negative profit growth of -11% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Buckle. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Although BKE is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to BKE, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping tabs on BKE for some time, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
If you want to dive deeper into Buckle, you'd also look into what risks it is currently facing. Be aware that Buckle is showing 2 warning signs in our investment analysis and 1 of those doesn't sit too well with us...
If you are no longer interested in Buckle, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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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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