National Beverage Corp. (NASDAQ:FIZZ), which is in the beverage business, and is based in United States, received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to $58.12 at one point, and dropping to the lows of $40.83. 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 National Beverage’s current trading price of $43.55 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at National Beverage’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is National Beverage worth?
According to my valuation model, the stock is currently overvalued by about 27.69%, trading at US$43.55 compared to my intrinsic value of $34.11. This means that the opportunity to buy National Beverage at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that National Beverage’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.
Can we expect growth from National Beverage?
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 an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for National Beverage, at least in the near future.
What this means for you:
Are you a shareholder? If you believe FIZZ is currently trading above its value, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the risk from a negative growth outlook, this could be the right time to de-risk your portfolio. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on FIZZ for a while, now may not be the best time to enter into the stock. Its price has risen beyond its true value, on top of a negative future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on National Beverage. You can find everything you need to know about National Beverage in the latest infographic research report. If you are no longer interested in National Beverage, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.