Is It Too Late To Consider Buying Sleep Country Canada Holdings Inc. (TSE:ZZZ)?

While Sleep Country Canada Holdings Inc. (TSE:ZZZ) might not have the largest market cap around , it saw a decent share price growth of 12% on the TSX over the last few months. The company is inching closer to its yearly highs following the recent share price climb. 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 take a look at Sleep Country Canada Holdings’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Sleep Country Canada Holdings

What Is Sleep Country Canada Holdings Worth?

Great news for investors – Sleep Country Canada Holdings is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is CA$46.14, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Sleep Country Canada Holdings’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.

What kind of growth will Sleep Country Canada Holdings generate?

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 relatively muted profit growth of 5.6% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Sleep Country Canada Holdings, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since ZZZ is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

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

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. You'd be interested to know, that we found 2 warning signs for Sleep Country Canada Holdings and you'll want to know about these.

If you are no longer interested in Sleep Country Canada 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com