BJ’s Restaurants Inc (NASDAQ:BJRI), a hospitality company based in United States, received a lot of attention from a substantial price increase on the NasdaqGS over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on BJ’s Restaurants’s outlook and valuation to see if the opportunity still exists. Check out our latest analysis for BJ’s Restaurants

What’s the opportunity in BJ’s Restaurants?

According to my valuation model, BJ’s Restaurants seems to be fairly priced at around 0.46% below my intrinsic value, which means if you buy BJ’s Restaurants today, you’d be paying a fair price for it. And if you believe that the stock is really worth $45.11, then there’s not much of an upside to gain from mispricing. In addition to this, it seems like BJ’s Restaurants’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.

What kind of growth will BJ’s Restaurants generate?

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 negative profit growth of -15.92% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for BJ’s Restaurants. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? BJRI seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on BJRI for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on BJRI should the price fluctuate below its true value.