Stock Analysis

At US$54.88, Is It Time To Put Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) On Your Watch List?

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While Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the NASDAQGM over the last few months, increasing to US$68.59 at one point, and dropping to the lows of US$51.47. 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 Ollie's Bargain Outlet Holdings' current trading price of US$54.88 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 Ollie's Bargain Outlet Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Ollie's Bargain Outlet Holdings

What's The Opportunity In Ollie's Bargain Outlet Holdings?

According to my valuation model, Ollie's Bargain Outlet Holdings seems to be fairly priced at around 12.61% above my intrinsic value, which means if you buy Ollie's Bargain Outlet Holdings today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $48.74, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Ollie's Bargain Outlet Holdings’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will Ollie's Bargain Outlet Holdings generate?

NasdaqGM:OLLI Earnings and Revenue Growth October 22nd 2022

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. With profit expected to grow by 50% over the next year, the near-term future seems bright for Ollie's Bargain Outlet Holdings. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? OLLI’s optimistic future growth appears to have been factored into the current share price, 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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on OLLI, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Every company has risks, and we've spotted 1 warning sign for Ollie's Bargain Outlet Holdings you should know about.

If you are no longer interested in Ollie's Bargain Outlet Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Valuation is complex, but we're helping make it simple.

Find out whether Ollie's Bargain Outlet Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.