At US$35.69, Is The Buckle, Inc. (NYSE:BKE) Worth Looking At Closely?

The Buckle, Inc. (NYSE:BKE), is not the largest company out there, but it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$49.74 at one point, and dropping to the lows of US$34.31. 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 Buckle's current trading price of US$35.69 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Buckle’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Buckle

What Is Buckle Worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 12% below my intrinsic value, which means if you buy Buckle today, you’d be paying a fair price for it. And if you believe that the stock is really worth $40.63, then there’s not much of an upside to gain from mispricing. What's more, Buckle’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of Buckle look like?

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. However, with a negative profit growth of -6.1% expected next year, near-term growth certainly doesn’t appear to be a driver for a buy decision for Buckle. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? BKE seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on BKE for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on BKE should the price fluctuate below its true value.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Every company has risks, and we've spotted 3 warning signs for Buckle (of which 1 is a bit unpleasant!) you should know about.

If you are no longer interested in Buckle, 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.