Yahoo Finance Is It Time To Consider Buying Kirkland's, Inc. (NASDAQ:KIRK)?
While Kirkland's, Inc. (NASDAQ:KIRK) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the NASDAQGS over the last few months. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine Kirkland's’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for Kirkland's
What Is Kirkland's Worth?
Good news, investors! Kirkland's is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $5.71, but it is currently trading at US$3.60 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Kirkland's’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What kind of growth will Kirkland's generate?
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 negative profit growth of -2.7% expected next year, near-term growth certainly doesn’t appear to be a driver for a buy decision for Kirkland's. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Although KIRK is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to KIRK, 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 tabs on KIRK for some time, but hesitant on making the leap, I 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.
In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. To that end, you should learn about the 3 warning signs we've spotted with Kirkland's (including 2 which are concerning).
If you are no longer interested in Kirkland's, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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