Is Now An Opportune Moment To Examine Bed Bath & Beyond Inc. (NASDAQ:BBBY)?

Bed Bath & Beyond Inc. (NASDAQ:BBBY), might not be a large cap stock, but it saw a significant share price rise of over 20% in the past couple of months on the NASDAQGS. 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, what if the stock is still a bargain? Let’s take a look at Bed Bath & Beyond’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Bed Bath & Beyond

Is Bed Bath & Beyond still cheap?

Great news for investors – Bed Bath & Beyond is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $32.22, 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 Bed Bath & Beyond’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.

What kind of growth will Bed Bath & Beyond generate?

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 expected decline of -8.5% in revenues over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Bed Bath & Beyond. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? Although BBBY is currently undervalued, 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 BBBY, 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 an eye on BBBY for a while, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, 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. You'd be interested to know, that we found 1 warning sign for Bed Bath & Beyond and you'll want to know about it.

If you are no longer interested in Bed Bath & Beyond, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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.

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