Is National Bank Holdings Corporation (NYSE:NBHC) Potentially Undervalued?

National Bank Holdings Corporation (NYSE:NBHC), operating in the financial services industry based in United States, saw a decent share price growth in the teens level on the NYSE 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. But what if there is still an opportunity to buy? Let’s examine National Bank Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for National Bank Holdings

Is National Bank Holdings still cheap?

Good news, investors! National Bank Holdings is still a bargain right now. According to my valuation, the intrinsic value for the stock is $31.67, but it is currently trading at US$24.33 on the share market, meaning that there is still an opportunity to buy now. However, given that National Bank 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 does the future of National Bank Holdings look like?

NYSE:NBHC Past and Future Earnings May 12th 2020
NYSE:NBHC Past and Future Earnings May 12th 2020

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 an extremely negative double-digit change in profit expected next year, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for National Bank Holdings, at least in the near future.

What this means for you:

Are you a shareholder? Although NBHC is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to NBHC, 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 an eye on NBHC for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on National Bank Holdings. You can find everything you need to know about National Bank Holdings in the latest infographic research report. If you are no longer interested in National Bank Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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