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Johnson Outdoors Inc. (NASDAQ:JOUT), which is in the leisure business, and is based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine Johnson Outdoors’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Is Johnson Outdoors still cheap?The stock seems fairly valued at the moment according to my valuation model. It’s trading around 9.2% below my intrinsic value, which means if you buy Johnson Outdoors today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $72.25, then there isn’t much room for the share price grow beyond what it’s currently trading. What’s more, Johnson Outdoors’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What does the future of Johnson Outdoors look like?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 a relatively muted profit growth of 3.3% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Johnson Outdoors, at least in the short term.
What this means for you:
Are you a shareholder? JOUT’s future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. 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 JOUT, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Johnson Outdoors. You can find everything you need to know about Johnson Outdoors in the latest infographic research report. If you are no longer interested in Johnson Outdoors, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.