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While Guess?, Inc. (NYSE:GES) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$18.04 at one point, and dropping to the lows of US$10.16. 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 Guess?'s current trading price of US$10.16 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 Guess?’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Guess?
What Is Guess? Worth?
Good news, investors! Guess? is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 5.66x is currently well-below the industry average of 14.63x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Guess?’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 Guess? 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. However, with a relatively muted revenue growth of 5.8% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Guess?, at least in the short term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since GES is currently trading below the industry PE ratio, 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 price multiple.
Are you a potential investor? If you’ve been keeping an eye on GES 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 GES. 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 investment decision.