Should You Buy Iconix Brand Group Inc (NASDAQ:ICON) Now?

Iconix Brand Group Inc (NASDAQ:ICON), a luxury company based in United States, received a lot of attention from a substantial price movement on the NasdaqGS over the last few months, increasing to $1.19 at one point, and dropping to the lows of $0.59. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Iconix Brand Group's current trading price of $0.60 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 Iconix Brand Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View out our latest analysis for Iconix Brand Group

Is Iconix Brand Group still cheap?

Good news, investors! Iconix Brand Group is still a bargain right now. According to my valuation, the intrinsic value for the stock is $23.85, but it is currently trading at US$0.60 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Iconix Brand Group’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.

What kind of growth will Iconix Brand Group 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. 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 expected decline of -8.87% in revenues over the next year, short term growth isn’t a driver for a buy decision for Iconix Brand Group. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? Although ICON is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to ICON, 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 ICON for some time, but hesitant on making the leap, I recommend you dig deeper 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 Iconix Brand Group. You can find everything you need to know about Iconix Brand Group in the latest infographic research report. If you are no longer interested in Iconix Brand Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.