At US$54.76, Is It Time To Put The Scotts Miracle-Gro Company (NYSE:SMG) On Your Watch List?

The Scotts Miracle-Gro Company (NYSE:SMG), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$77.70 at one point, and dropping to the lows of US$54.76. 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 Scotts Miracle-Gro's current trading price of US$54.76 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 Scotts Miracle-Gro’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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Is Scotts Miracle-Gro Still Cheap?

Good news, investors! Scotts Miracle-Gro is still a bargain right now. According to our valuation, the intrinsic value for the stock is $68.86, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because Scotts Miracle-Gro’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.

See our latest analysis for Scotts Miracle-Gro

What kind of growth will Scotts Miracle-Gro generate?

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. However, with a relatively muted revenue growth of 5.6% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Scotts Miracle-Gro, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since SMG is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on SMG for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy SMG. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

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. When we did our research, we found 2 warning signs for Scotts Miracle-Gro (1 makes us a bit uncomfortable!) that we believe deserve your full attention.

If you are no longer interested in Scotts Miracle-Gro, 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.