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While Harley-Davidson, Inc. (NYSE:HOG) might not be the most widely known stock at the moment, it saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Harley-Davidson’s outlook and value based on the most recent financial data to see if the opportunity still exists.
View our latest analysis for Harley-Davidson
Is Harley-Davidson still cheap?
Great news for investors – Harley-Davidson is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $53.43, but it is currently trading at US$35.20 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Harley-Davidson’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 Harley-Davidson look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Harley-Davidson's earnings over the next few years are expected to increase by 25%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since HOG is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. 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 HOG for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy HOG. 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.
If you want to dive deeper into Harley-Davidson, you'd also look into what risks it is currently facing. Our analysis shows 2 warning signs for Harley-Davidson (1 doesn't sit too well with us!) and we strongly recommend you look at them before investing.