Is It Time To Consider Buying The Buckle, Inc. (NYSE:BKE)?

While The Buckle, Inc. (NYSE:BKE) might not have the largest market cap around , it received a lot of attention from a substantial price increase on the NYSE over the last few months. 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 small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Today we will analyse the most recent data on Buckle’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Buckle

What Is Buckle Worth?

Great news for investors – Buckle is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $65.64, but it is currently trading at US$39.97 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Buckle’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Buckle look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 -8.6% expected over the next couple of years, 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? Although BKE is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to BKE, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on BKE for some time, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you'd like to know more about Buckle as a business, it's important to be aware of any risks it's facing. Our analysis shows 2 warning signs for Buckle (1 is a bit concerning!) and we strongly recommend you look at these before investing.

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.