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While Winmark Corporation (NASDAQ:WINA) might not have the largest market cap around , it saw significant share price movement during recent months on the NASDAQGM, rising to highs of US$408 and falling to the lows of US$304. 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 Winmark's current trading price of US$322 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 Winmark’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What Is Winmark Worth?
According to our valuation model, Winmark seems to be fairly priced at around 6.85% above our intrinsic value, which means if you buy Winmark today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $301.37, there’s only an insignificant downside when the price falls to its real value. In addition to this, Winmark has a low beta, which suggests its share price is less volatile than the wider market.
View our latest analysis for Winmark
What does the future of Winmark 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. With profit expected to grow by a double-digit 18% over the next couple of years, the outlook is positive for Winmark. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? It seems like the market has already priced in WINA’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on WINA, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.