Is It Too Late To Consider Buying MTY Food Group Inc. (TSE:MTY)?

MTY Food Group Inc. (TSE:MTY), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the TSX over the last few months. 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, could the stock still be trading at a relatively cheap price? Let’s examine MTY Food Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for MTY Food Group

What is MTY Food Group worth?

Good news, investors! MTY Food Group is still a bargain right now. My valuation model shows that the intrinsic value for the stock is CA$91.64, but it is currently trading at CA$55.19 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, MTY Food Group’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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 MTY Food Group 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 the company's future expectations. MTY Food Group's revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since MTY is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on MTY for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MTY. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

If you want to dive deeper into MTY Food Group, you'd also look into what risks it is currently facing. When we did our research, we found 2 warning signs for MTY Food Group (1 makes us a bit uncomfortable!) that we believe deserve your full attention.

If you are no longer interested in MTY Food 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.