Stock Analysis

Is It Too Late To Consider Buying Apogee Enterprises, Inc. (NASDAQ:APOG)?

NasdaqGS:APOG
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While Apogee Enterprises, Inc. (NASDAQ:APOG) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the NASDAQGS 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, what if the stock is still a bargain? Let’s examine Apogee Enterprises’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Apogee Enterprises

What Is Apogee Enterprises Worth?

According to my valuation model, Apogee Enterprises seems to be fairly priced at around 19% below my intrinsic value, which means if you buy Apogee Enterprises today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $54.36, then there isn’t much room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Apogee Enterprises’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from Apogee Enterprises?

earnings-and-revenue-growth
NasdaqGS:APOG Earnings and Revenue Growth April 20th 2023

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 negative profit growth of -14% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Apogee Enterprises. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Currently, APOG 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 reduce the risk in 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 APOG for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears 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 gel your views on APOG should the price fluctuate below its true value.

So while earnings quality is important, it's equally important to consider the risks facing Apogee Enterprises at this point in time. You'd be interested to know, that we found 1 warning sign for Apogee Enterprises and you'll want to know about it.

If you are no longer interested in Apogee Enterprises, 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.