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La-Z-Boy Incorporated (NYSE:LZB), is not the largest company out there, but it saw significant share price movement during recent months on the NYSE, rising to highs of US$33.01 and falling to the lows of US$27.39. 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 La-Z-Boy's current trading price of US$27.64 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 La-Z-Boy’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 La-Z-Boy
Is La-Z-Boy Still Cheap?
The stock is currently trading at US$27.64 on the share market, which means it is overvalued by 26% compared to my intrinsic value of $21.98. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Given that La-Z-Boy’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of La-Z-Boy look like?
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. 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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for La-Z-Boy, at least in the near future.
What This Means For You
Are you a shareholder? If you believe LZB should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the risk from a negative growth outlook, this could be the right time to de-risk your portfolio. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on LZB for a while, now may not be the best time to enter into the stock. you may want to reconsider buying the stock at this time. The company’s price has climbed passed its true value, in addition to a risky future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?