At US$5.80, Is Sportsman's Warehouse Holdings, Inc. (NASDAQ:SPWH) Worth Looking At Closely?
Sportsman's Warehouse Holdings, Inc. (NASDAQ:SPWH), is not the largest company out there, but it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine Sportsman's Warehouse Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for Sportsman's Warehouse Holdings
What Is Sportsman's Warehouse Holdings Worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 16.03% above my intrinsic value, which means if you buy Sportsman's Warehouse Holdings today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $5.00, there’s only an insignificant downside when the price falls to its real value. In addition to this, Sportsman's Warehouse Holdings has a low beta, which suggests its share price is less volatile than the wider market.
Can we expect growth from Sportsman's Warehouse Holdings?
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. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Sportsman's Warehouse Holdings, it is expected to deliver a negative earnings growth of -19%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What This Means For You
Are you a shareholder? Currently, SPWH appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on SPWH for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on SPWH should the price fluctuate below its true value.
If you want to dive deeper into Sportsman's Warehouse Holdings, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 2 warning signs for Sportsman's Warehouse Holdings (of which 1 doesn't sit too well with us!) you should know about.
If you are no longer interested in Sportsman's Warehouse Holdings, 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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