Is It Time To Consider Buying Monarch Casino & Resort, Inc. (NASDAQ:MCRI)?

Monarch Casino & Resort, Inc. (NASDAQ:MCRI), might not be a large cap stock, but it saw a decent share price growth in the teens level on the NASDAQGS 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, what if the stock is still a bargain? Let’s examine Monarch Casino & Resort’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Monarch Casino & Resort

What's The Opportunity In Monarch Casino & Resort?

According to my valuation model, Monarch Casino & Resort seems to be fairly priced at around 16% below my intrinsic value, which means if you buy Monarch Casino & Resort today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $86.22, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Monarch Casino & Resort’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 does the future of Monarch Casino & Resort look like?

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. Monarch Casino & Resort's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? MCRI’s optimistic 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 confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on MCRI, 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. At Simply Wall St, we found 2 warning signs for Monarch Casino & Resort and we think they deserve your attention.

If you are no longer interested in Monarch Casino & Resort, 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.