At US$30.82, Is MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) Worth Looking At Closely?

MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT), is not the largest company out there, but it received a lot of attention from a substantial price increase on the NASDAQGM over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at MasterCraft Boat Holdings’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for MasterCraft Boat Holdings

What Is MasterCraft Boat Holdings Worth?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that MasterCraft Boat Holdings’s ratio of 7.77x is trading slightly below its industry peers’ ratio of 11.49x, which means if you buy MasterCraft Boat Holdings today, you’d be paying a reasonable price for it. And if you believe MasterCraft Boat Holdings should be trading in this range, then there isn’t much room for the share price to grow beyond the levels of other industry peers over the long-term. Although, there may be an opportunity to buy in the future. This is because MasterCraft Boat Holdings’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 MasterCraft Boat Holdings?

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. Though in the case of MasterCraft Boat Holdings, it is expected to deliver a relatively unexciting earnings growth of 0.1%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for MasterCraft Boat Holdings, at least in the near term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in MCFT’s growth outlook, with shares trading around industry price multiples. 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 MCFT? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping tabs on MCFT, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive growth outlook may mean it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about MasterCraft Boat Holdings as a business, it's important to be aware of any risks it's facing. For example - MasterCraft Boat Holdings has 1 warning sign we think you should be aware of.

If you are no longer interested in MasterCraft Boat Holdings, 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.