While National Vision Holdings, Inc. (NASDAQ:EYE) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$23.81 at one point, and dropping to the lows of US$14.76. 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 National Vision Holdings' current trading price of US$15.36 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 National Vision Holdings's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What's The Opportunity In National Vision Holdings?
According to our valuation model, National Vision Holdings seems to be fairly priced at around 4.17% above our intrinsic value, which means if you buy National Vision Holdings today, you'd be paying a relatively fair price for it. And if you believe the company's true value is $14.75, then there isn't really any room for the share price grow beyond what it's currently trading. Is there another opportunity to buy low in the future? Since National Vision Holdings's share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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.
What does the future of National Vision Holdings look like?
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. However, with an expected decline of -5.8% in revenues over the next couple of years, near-term growth certainly doesn't appear to be a driver for a buy decision for National Vision Holdings. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Currently, EYE 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 de-risk 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 an eye on EYE for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there's less benefit from mispricing. In addition to this, 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 EYE should the price fluctuate below its true value.
Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. So feel free to check out our free graph representing analyst forecasts.
If you are no longer interested in National Vision 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.