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While Ethan Allen Interiors Inc. (NYSE:ETD) might not have the largest market cap around , it saw significant share price movement during recent months on the NYSE, rising to highs of US$31.72 and falling to the lows of US$27.52. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Ethan Allen Interiors' current trading price of US$28.52 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Ethan Allen Interiors’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Ethan Allen Interiors
What's The Opportunity In Ethan Allen Interiors?
Good news, investors! Ethan Allen Interiors is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is $38.57, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because Ethan Allen Interiors’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Ethan Allen Interiors?
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 Ethan Allen Interiors, it is expected to deliver a relatively unexciting earnings growth of 2.1%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Ethan Allen Interiors, at least in the near term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since ETD is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on ETD for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ETD. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.