Stock Analysis

Why Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) Could Be Worth Watching

NasdaqGM:OLLI
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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 led the NASDAQGM gainers with a relatively large price hike in the past couple of weeks. As a mid-cap 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? 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 the opportunity still exists.

View our latest analysis for Ollie's Bargain Outlet Holdings

Is Ollie's Bargain Outlet Holdings still cheap?

According to my valuation model, the stock is currently overvalued by about 24%, trading at US$68.59 compared to my intrinsic value of $55.47. This means that the opportunity to buy Ollie's Bargain Outlet Holdings at a good price has disappeared! In addition to this, it seems like Ollie's Bargain Outlet Holdings’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

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

earnings-and-revenue-growth
NasdaqGM:OLLI Earnings and Revenue Growth July 18th 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. 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. With profit expected to grow by a double-digit 16% in the upcoming year, the short-term outlook is positive 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 above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe OLLI should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on OLLI for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for OLLI, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Ollie's Bargain Outlet Holdings as a business, it's important to be aware of any risks it's facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Ollie's Bargain Outlet Holdings.

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.