While GreenTree Hospitality Group Ltd. (NYSE:GHG) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the NYSE, rising to highs of US$14.17 and falling to the lows of US$12.43. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether GreenTree Hospitality Group's current trading price of US$13.18 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at GreenTree Hospitality Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for GreenTree Hospitality Group
What is GreenTree Hospitality Group worth?
According to my valuation model, GreenTree Hospitality Group seems to be fairly priced at around 9.3% below my intrinsic value, which means if you buy GreenTree Hospitality Group today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $14.54, then there’s not much of an upside to gain from mispricing. In addition to this, GreenTree Hospitality Group has a low beta, which suggests its share price is less volatile than the wider market.
What does the future of GreenTree Hospitality Group 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. 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. GreenTree Hospitality Group's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in GHG’s positive outlook, with shares trading around its fair value. 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 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 GHG, 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
If you'd like to know more about GreenTree Hospitality Group as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 2 warning signs for GreenTree Hospitality Group and you'll want to know about these.
If you are no longer interested in GreenTree Hospitality Group, 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. 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.
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About NYSE:GHG
GreenTree Hospitality Group
Through its subsidiaries, develops leased-and-operated, and franchised-and-managed hotels and restaurants in the People’s Republic of China.
Proven track record with adequate balance sheet.
