Assessing HNI’s Valuation After a Recent Share Price Rebound (HNI)

HNI is back on investors radar after a steady climb this month, even as the stock remains down over the past year. The move raises questions about whether the recent strength is sustainable.

See our latest analysis for HNI.

The recent uptick looks more like a pause in a choppy year, with a 90 day share price return of negative 7.99% and a three year total shareholder return of 62.31% hinting that longer term holders are still comfortably ahead.

If this kind of rebound has you rethinking your watchlist, it could be a good moment to scout fast growing stocks with high insider ownership as potential next wave candidates.

With earnings still growing and the share price trading at a steep discount to analyst targets, the key debate now is simple: is HNI quietly undervalued or is the market already pricing in its future growth?

Most Popular Narrative Narrative: 37.2% Undervalued

Compared to HNI's last close at $41.89, the most popular narrative points to a meaningfully higher fair value anchored in steady earnings growth and expanding margins.

The analysts have a consensus price target of $66.75 for HNI based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $73.0, and the most bearish reporting a price target of just $60.0.

Read the complete narrative.

Want to see how modest revenue growth, rising margins and share buybacks still add up to a much higher fair value than today? The full narrative explains the compounding math behind that upside case.

Result: Fair Value of $66.75 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent hybrid work trends or a sharper slowdown in housing and construction could quickly undermine the optimistic earnings and valuation narrative for HNI.

Find out about the key risks to this HNI narrative.

Build Your Own HNI Narrative

If you see the story differently or want to stress test the numbers yourself, you can build a custom view in minutes: Do it your way.

A good starting point is our analysis highlighting 6 key rewards investors are optimistic about regarding HNI.

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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.

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