When Should You Buy 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS)?

1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS), might not be a large cap stock, but it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today we will analyse the most recent data on 1-800-FLOWERS.COM’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for 1-800-FLOWERS.COM

Is 1-800-FLOWERS.COM Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 6.9% below our intrinsic value, which means if you buy 1-800-FLOWERS.COM today, you’d be paying a fair price for it. And if you believe that the stock is really worth $11.87, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because 1-800-FLOWERS.COM’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 1-800-FLOWERS.COM generate?

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. 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. Though in the case of 1-800-FLOWERS.COM, it is expected to deliver a relatively unexciting top-line growth of 0.4% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in FLWS’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. 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 FLWS, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

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. Every company has risks, and we've spotted 1 warning sign for 1-800-FLOWERS.COM you should know about.

If you are no longer interested in 1-800-FLOWERS.COM, 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.