In This Article:
The Buckle, Inc. (NYSE:BKE), is not the largest company out there, but it received a lot of attention from a substantial price increase on the NYSE over the last few months. The recent share price gains has brought the company back closer to its yearly peak. As a US$2.5b market-cap stock, it seems odd Buckle is not more well-covered by analysts. Although, there is more of an opportunity for mispricing in stocks with low coverage, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine Buckle’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for Buckle
Is Buckle Still Cheap?
Great news for investors – Buckle is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $72.33, but it is currently trading at US$50.81 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Buckle’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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 Buckle look like?
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. Though in the case of Buckle, it is expected to deliver a relatively unexciting earnings growth of 4.1%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since BKE is currently undervalued, it may be a great time to increase your holdings in the stock. 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 BKE for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy BKE. 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 buy.