Haverty Furniture Companies, Inc. (NYSE: HVT), is not the largest company in the market, but it has received a lot of attention due to substantial price movement on the NYSE in recent months, reaching US $ 38.63 at one point, and falling to a low of US $ 28.70. Certain movements in stock prices can give investors a better opportunity to get into the stock and potentially buy at a lower price. One question to be answered is whether Haverty Furniture Companies‘ current price of US $ 31.38 reflects the true value of small cap? Or is it currently undervalued, giving us the opportunity to buy? Let’s take a look at the outlook and value of Haverty Furniture Companies based on the most recent financial data to see if there are any catalysts for a price change.
What is Haverty Furniture Companies worth?
The stock price looks reasonable at the moment based on my multiple price model, where I compare the company’s price-to-earnings ratio to the industry average. In this case, I used the price-to-earnings (PE) ratio since there isn’t enough information to reliably forecast the stock’s cash flow. I find that Haverty Furniture Companies’ ratio of 6.08x is trading slightly below its industry peers ratio of 10.39x, which means if you buy Haverty Furniture Companies today, you would pay a price. reasonable for that. And if you think Haverty furniture companies should trade at that level in the long run, then there isn’t much to gain over other peers in the industry. Although there may be an opportunity to buy in the future. This is because Haverty Furniture Companies’ beta (a measure of stock price volatility) is high, which means its price movements will be inflated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall more than the rest of the market, providing a prime buying opportunity.
What does the future look like for Haverty furniture companies?
NYSE: HVT Profit and Revenue Growth November 21, 2021
Investors looking for growth in their portfolio may want to consider a company’s prospects before buying its shares. Buying a large business with a solid outlook for a cheap price is always a good investment, so let’s also take a look at the future expectations of the business. However, with negative profit growth of -9.3% expected over the next two years, near-term growth certainly does not appear to be a driver for a buying decision for Haverty Furniture Companies. This certainty tilts the risk-reward scale towards higher risk.
What this means for you:
Are you a shareholder? Currently, HVT appears to be trading around industry price multiples, but given the uncertainty of negative returns going forward, this might be a good time to reduce your portfolio risk. Is your current equity exposure optimal for your entire portfolio? And is the opportunity cost of owning a negative outlook stock too high? Before making a decision on HVT, check if its fundamentals have changed.
Are you a potential investor? If you’ve been keeping your eye on HVT for a while, this might not be the most optimal time to buy, given that it trades around industry price multiples. This means that there is less benefit to wrong pricing. On top of that, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors that we haven’t considered today that can help crystallize your perspective on HVT if the price moves below the industry PE ratio.
If you are interested in learning more about Haverty Furniture Companies as a business, it is important to be aware of the risks it faces. To help you, we have discovered 3 warning signs (1 doesn’t suit us very well!) Which you should be aware of before purchasing shares of Haverty Furniture Companies.
If you are no longer interested in Haverty Furniture Companies, you can use our free platform to view our list of over 50 other stocks with high growth potential.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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