At US$35.41, Is Harley-Davidson, Inc. (NYSE:HOG) Worth Looking At Closely?

Harley-Davidson, Inc. (NYSE:HOG), is not the largest company out there, but it saw a decent share price growth of 11% on the NYSE over the last few months. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Harley-Davidson’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Harley-Davidson

What Is Harley-Davidson Worth?

Great news for investors – Harley-Davidson is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Harley-Davidson’s ratio of 6.88x is below its peer average of 13.3x, which indicates the stock is trading at a lower price compared to the Auto industry. However, given that Harley-Davidson’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 Harley-Davidson generate?

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 a negative profit growth of -7.5% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Harley-Davidson. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although HOG is currently trading below the industry PE ratio, the adverse prospect of negative growth brings about some degree of risk. We recommend you think about whether you want to increase your portfolio exposure to HOG, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on HOG for some time, but hesitant on making the leap, we recommend you research further into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you'd like to know more about Harley-Davidson as a business, it's important to be aware of any risks it's facing. Our analysis shows 3 warning signs for Harley-Davidson (2 can't be ignored!) and we strongly recommend you look at these before investing.

If you are no longer interested in Harley-Davidson, 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.