Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Foot Locker, Inc. (NYSE:FL), which is in the specialty retail business, and is based in United States, saw significant share price movement during recent months on the NYSE, rising to highs of $64.45 and falling to the lows of $39.35. 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 Foot Locker’s current trading price of $42.27 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 Foot Locker’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is Foot Locker still cheap?
Great news for investors – Foot Locker is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $67.16, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Foot Locker’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, 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 does the future of Foot Locker 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 relatively muted profit growth of 8.7% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Foot Locker, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since FL is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on FL for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy FL. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Foot Locker. You can find everything you need to know about Foot Locker in the latest infographic research report. If you are no longer interested in Foot Locker, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.