Is Now An Opportune Moment To Examine Floor & Decor Holdings, Inc. (NYSE:FND)?

By
Simply Wall St
Published
April 16, 2022
NYSE:FND
Source: Shutterstock

Floor & Decor Holdings, Inc. (NYSE:FND), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$119 at one point, and dropping to the lows of US$80.18. 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 Floor & Decor Holdings' current trading price of US$83.15 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 Floor & Decor Holdings’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 Floor & Decor Holdings

Is Floor & Decor Holdings still cheap?

Good news, investors! Floor & Decor Holdings is still a bargain right now. According to my valuation, the intrinsic value for the stock is $131.20, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Floor & Decor Holdings’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Floor & Decor Holdings look like?

earnings-and-revenue-growth
NYSE:FND Earnings and Revenue Growth April 16th 2022

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 85% over the next couple of years, the future seems bright for Floor & Decor 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? Since FND is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. 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 FND for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy FND. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. To help with this, we've discovered 2 warning signs (1 is a bit unpleasant!) that you ought to be aware of before buying any shares in Floor & Decor Holdings.

If you are no longer interested in Floor & Decor Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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