Stock Analysis

At US$30.13, Is It Time To Put Hooker Furniture Corporation (NASDAQ:HOFT) On Your Watch List?

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NasdaqGS:HOFT
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Hooker Furniture Corporation (NASDAQ:HOFT), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$35.16 and falling to the lows of US$27.50. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Hooker Furniture's current trading price of US$30.13 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Hooker Furniture’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Hooker Furniture

What is Hooker Furniture worth?

According to my valuation model, Hooker Furniture seems to be fairly priced at around 11% below my intrinsic value, which means if you buy Hooker Furniture today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $33.81, then there’s not much of an upside to gain from mispricing. What's more, Hooker Furniture’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Hooker Furniture?

earnings-and-revenue-growth
NasdaqGS:HOFT Earnings and Revenue Growth January 31st 2021

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. With revenues expected to grow by a double-digit 15% over the next couple of years, the outlook is positive for Hooker Furniture. If the level of expenses is able to be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? It seems like the market has already priced in HOFT’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on HOFT, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. In terms of investment risks, we've identified 2 warning signs with Hooker Furniture, and understanding them should be part of your investment process.

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Valuation is complex, but we're helping make it simple.

Find out whether Hooker Furnishings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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