Is It Time To Consider Buying Nu Skin Enterprises, Inc. (NYSE:NUS)?

Nu Skin Enterprises, Inc. (NYSE:NUS), is not the largest company out there, but it saw a significant share price rise of over 20% in the past couple of months on the NYSE. 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, could the stock still be trading at a relatively cheap price? Let’s examine Nu Skin Enterprises’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Nu Skin Enterprises

What's the opportunity in Nu Skin Enterprises?

Good news, investors! Nu Skin Enterprises 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 11.58x is currently well-below the industry average of 16.74x, meaning that it is trading at a cheaper price relative to its peers. However, given that Nu Skin Enterprises’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 Nu Skin Enterprises?

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. However, with a negative profit growth of -9.0% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Nu Skin Enterprises. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? Although NUS is currently trading below the industry PE ratio, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to NUS, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on NUS for some time, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For instance, we've identified 2 warning signs for Nu Skin Enterprises (1 is potentially serious) you should be familiar with.

If you are no longer interested in Nu Skin Enterprises, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

What are the risks and opportunities for Nu Skin Enterprises?

NYSE:NUS

Nu Skin Enterprises

Nu Skin Enterprises, Inc., together with its subsidiaries, develops and distributes various beauty and wellness products worldwide.Show more

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Rewards

• Trading at 26% below our estimate of its fair value

• Earnings are forecast to grow 26.79% per year

Risks

• Significant insider selling over the past 3 months

• Large one-off items impacting financial results

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Share Price

Market Cap

1Y Return

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Nu Skin Enterprises

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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.