At US$19.95, Is Guess', Inc. (NYSE:GES) Worth Looking At Closely?

Guess', Inc. (NYSE:GES), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine Guess'’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Guess'

What Is Guess' Worth?

According to my valuation model, Guess' seems to be fairly priced at around 5.86% above my intrinsic value, which means if you buy Guess' today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $18.85, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Guess'’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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 Guess' 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. 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. However, with a relatively muted revenue growth of 7.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Guess', at least in the short term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in GES’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on GES, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about Guess' as a business, it's important to be aware of any risks it's facing. For example - Guess' has 3 warning signs we think you should be aware of.

If you are no longer interested in Guess', 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.