Sally Beauty Holdings (NYSE:SBH) may not have the largest market capitalization, but it saw its stock rise by a hefty 45% on the NYSE over the past two months. The company is currently trading at its highest price since the beginning of the year, following a recent jump in its stock price. With many analysts covering the stock, you might expect price-sensitive announcements to be already factored into the stock price. But what if there is still an opportunity to buy? Let’s take a closer look at Sally Beauty Holdings’ valuation and outlook to determine if there’s still a bargain opportunity.
Check out our latest analysis for Sally Beauty Holdings.
What are the opportunities for Sally Beauty Holdings?
Good news for investors – Sally Beauty Holdings is still trading at a fairly cheap price. According to our valuation, the stock has an intrinsic value of $20.96, but it is currently trading at $13.58 on the stock market, meaning there is still a chance to buy. However, there may be an opportunity to purchase again in the future. This is because Sally Beauty Holdings’ beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated compared to the rest of the market. If the market is bearish, the company’s stock price will likely fall more than the rest of the market, creating a great buying opportunity.
What kind of growth will Sally Beauty Holdings generate?
Profit and revenue growth
Future outlook is an important aspect when considering buying a stock, especially for investors looking for growth in their portfolio. While value investors would argue that it’s the intrinsic value relative to the price that matters most, a more compelling investment thesis would be high growth potential at a cheap price. Sally Beauty Holdings’s earnings over the next few years are expected to grow by 46%, indicating a very optimistic outlook for the future. This should lead to stronger cash flow and a higher share price.
what this means to you
Are you a shareholder? SBH is currently undervalued, so now may be a great time to further increase your holdings in the stock. Despite the positive outlook, it seems like this growth is not yet fully factored into the stock price. However, there are other factors to consider, such as capital structure, which may explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on SBH for a while, now might be the time to get into the stock. While its strong future outlook is not yet fully reflected in the current share price, it means it’s not too late to buy SBH. However, to make an informed investment decision, please consider other factors, such as the track record of the management team, before making any investment decision.
the story continues
So if you want to dig deeper into this stock, it’s important to consider the risks facing this stock. From an investment risk perspective, we’ve identified 1 warning sign for Sally Beauty Holdings. Understanding this should be part of your investment process.
If you are no longer interested in Sally Beauty 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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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
