Yahoo Finance Is Now An Opportune Moment To Examine Harley-Davidson, Inc. (NYSE:HOG)?
Harley-Davidson, Inc. (NYSE:HOG), might not be a large cap stock, but it saw a decent share price growth of 20% on the NYSE over the last few months. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. 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. But what if there is still an opportunity to buy? Let’s examine Harley-Davidson’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for Harley-Davidson
What's The Opportunity In Harley-Davidson?
Great news for investors – Harley-Davidson is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $59.97, but it is currently trading at US$38.13 on the share market, meaning that there is still an opportunity to buy now. However, given that Harley-Davidson’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 Harley-Davidson look like?
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. However, with a negative profit growth of -8.2% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Harley-Davidson. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Although HOG is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. We recommend you think about whether you want to increase your portfolio exposure to HOG, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on HOG for a while, but hesitant on making the leap, we recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
So while earnings quality is important, it's equally important to consider the risks facing Harley-Davidson at this point in time. Case in point: We've spotted 3 warning signs for Harley-Davidson you should be mindful of and 2 of these are potentially serious.
If you are no longer interested in Harley-Davidson, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
