Why Mohawk Industries, Inc. (NYSE:MHK) Could Be Worth Watching

Mohawk Industries, Inc. (NYSE:MHK), is not the largest company out there, but it saw a decent share price growth in the teens level on the NYSE over the last few months. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today I will analyse the most recent data on Mohawk Industries’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Mohawk Industries

Is Mohawk Industries Still Cheap?

Great news for investors – Mohawk Industries is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $166.02, but it is currently trading at US$103 on the share market, meaning that there is still an opportunity to buy now. However, given that Mohawk Industries’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Mohawk Industries generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. However, with a relatively muted revenue growth of 6.0% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Mohawk Industries, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since MHK is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on MHK for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MHK. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

Diving deeper into the forecasts for Mohawk Industries mentioned earlier will help you understand how analysts view the stock going forward. Luckily, you can check out what analysts are forecasting by clicking here.

If you are no longer interested in Mohawk Industries, 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.