Why Dunkin’ Brands Group Inc (DNKN) Could Be A Buy
Dunkin' Brands Group Inc (NASDAQ:DNKN), a consumer services company based in United States, saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $57.5 and falling to the lows of $51.17. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether DNKN's current trading price of $51.49 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at DNKN’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Dunkin' Brands Group
What's the opportunity in DNKN?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 16% above my intrinsic value, which means if you buy DNKN today, you’d be paying a relatively fair price for it. And if you believe that DNKN is really worth $43.3, there’s only an insignificant downside when the price falls to its real value. Furthermore, it seems like DNKN’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because DNKN’s stock is less volatile than the wider market given its low beta.
What does the future of DNKN look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares.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 DNKN future expectations. DNKN’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in DNKN’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at DNKN? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on DNKN, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for DNKN, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Dunkin' Brands Group. You can find everything you need to know about DNKN in the latest infographic research report. If you are no longer interested in Dunkin' Brands Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
