While National Beverage Corp. (NASDAQ:FIZZ) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price increase on the NASDAQGS over the last few months. As a US$5.1b market-cap stock, it seems odd National Beverage is not more well-covered by analysts. Although, there is more of an opportunity for mispricing in stocks with low coverage, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine National Beverage’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
What's The Opportunity In National Beverage?
Good news, investors! National Beverage is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $82.36, but it is currently trading at US$54.44 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, National Beverage’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will National Beverage generate?
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. National Beverage's earnings over the next few years are expected to increase by 43%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since FIZZ is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on FIZZ for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy FIZZ. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.
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. For example, National Beverage has 3 warning signs (and 1 which can't be ignored) we think you should know about.
If you are no longer interested in National Beverage, 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.
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