Ollie’s Bargain Outlet Holdings (OLLI): Is the Stock Undervalued After a Strong Run This Year?

Ollie's Bargain Outlet Holdings (OLLI) has quietly outpaced the market this year, with shares up 17% year to date. Recent trading activity suggests investors are paying closer attention, likely because of the company's solid revenue and earnings growth.

See our latest analysis for Ollie's Bargain Outlet Holdings.

After a strong run earlier in the year, Ollie's has shifted gears, with its 7-day share price return of 2.4% suggesting renewed momentum as investors recognize the company’s improving fundamentals. The stock’s 1-year total shareholder return of nearly 38% highlights how much confidence has grown around its long-term growth prospects.

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With Ollie’s stock now trading near all-time highs and outperforming the market, the real question is whether there is still room for upside or if the market has already priced in much of the expected future growth.

Most Popular Narrative: 13.4% Undervalued

Ollie’s last traded at $127, but the most widely followed narrative pegs fair value around $146.60, implying upside. This outlook relies heavily on whether recent momentum in revenue and margins can propel long-term returns above current market expectations.

The company is benefiting from a growing value-conscious consumer base, amplified by economic uncertainty and inflation. This is driving more customers toward discount retailers like Ollie's, boosting both store traffic and revenue growth, as seen by accelerated customer acquisition and rising loyalty program membership. (Revenue)

Read the complete narrative.

Want to know what drives this premium? The key lies in a bullish forecast of future earnings growth, with high-multiple valuations more often seen in fast-growing disruptors. What are analysts betting on that the market might be missing? Unlock the bold assumptions behind this winning narrative.

Result: Fair Value of $146.60 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Ollie's rapid store expansion and dependence on closeout inventory could pose risks if new locations underperform or if supply becomes less abundant.

Find out about the key risks to this Ollie's Bargain Outlet Holdings narrative.

Another View: Multiples Paint a Cautious Picture

Looking at traditional valuation ratios, Ollie’s is trading at a price-to-earnings ratio of 36.5x. That is significantly higher than its peer average of 20.3x, the global industry’s 19.9x, and even the fair ratio of 19x. This large gap highlights valuation risk, as investors are paying a premium for future growth today. Will Ollie’s continue delivering on expectations, or could sentiment shift if growth wobbles?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Ollie's Bargain Outlet Holdings Narrative

If you have your own ideas or want to dig deeper into the numbers, building your own narrative is quick and easy. You can get started in just a few minutes. Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Ollie's Bargain Outlet Holdings.

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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.

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