At US$4.01, Is Destination XL Group, Inc. (NASDAQ:DXLG) Worth Looking At Closely?
While Destination XL Group, Inc. (NASDAQ:DXLG) might not have the largest market cap around , it saw significant share price movement during recent months on the NASDAQGM, rising to highs of US$4.61 and falling to the lows of US$3.68. 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 Destination XL Group's current trading price of US$4.01 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 Destination XL Group’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 Destination XL Group
What Is Destination XL Group Worth?
The stock is currently trading at US$4.01 on the share market, which means it is overvalued by 21% compared to our intrinsic value of $3.31. This means that the opportunity to buy Destination XL Group at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that Destination XL Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Destination XL Group?
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 -7.9% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Destination XL Group. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? If you believe DXLG should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the risk from a negative growth outlook, this could be the right time to de-risk your portfolio. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on DXLG for a while, now may not be the best time to enter into the stock. you may want to reconsider buying the stock at this time. The company’s price has climbed passed its true value, in addition to a risky future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?
Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. At Simply Wall St, we found 1 warning sign for Destination XL Group and we think they deserve your attention.
If you are no longer interested in Destination XL Group, 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.
