What Does Bluegreen Vacations Holding Corporation's (NYSE:BVH) Share Price Indicate?

Bluegreen Vacations Holding Corporation (NYSE:BVH), might not be a large cap stock, but it led the NYSE gainers with a relatively large price hike in the past couple of weeks. Less-covered, small caps tend to present 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 Bluegreen Vacations Holding’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Bluegreen Vacations Holding

What's The Opportunity In Bluegreen Vacations Holding?

Good news, investors! Bluegreen Vacations Holding is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 9.41x is currently well-below the industry average of 21.59x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Bluegreen Vacations Holding’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Bluegreen Vacations Holding?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 7.9% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Bluegreen Vacations Holding, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since BVH is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on BVH for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy BVH. 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 assessment.

So while earnings quality is important, it's equally important to consider the risks facing Bluegreen Vacations Holding at this point in time. Every company has risks, and we've spotted 3 warning signs for Bluegreen Vacations Holding (of which 2 don't sit too well with us!) you should know about.

If you are no longer interested in Bluegreen Vacations Holding, 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.