While Harley-Davidson, Inc. (NYSE:HOG) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$43.74 at one point, and dropping to the lows of US$32.52. 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 Harley-Davidson's current trading price of US$33.54 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at Harley-Davidson's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

What's The Opportunity In Harley-Davidson?

Good news, investors! Harley-Davidson is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. We've used the price-to-earnings ratio in this instance because there's not enough visibility to forecast its cash flows. The stock's ratio of 7.08x is currently well-below the industry average of 18.27x, meaning that it is trading at a cheaper price relative to its peers. Although, there may be another chance to buy again in the future. This is because Harley-Davidson'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 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 relatively muted profit growth of 2.3% expected over the next couple of years, growth doesn't seem like a key driver for a buy decision for Harley-Davidson, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since HOG is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you've been keeping an eye on HOG for a while, now might be the time to enter the stock. Its future profit outlook isn't fully reflected in the current share price yet, which means it's not too late to buy HOG. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed assessment.

So while earnings quality is important, it's equally important to consider the risks facing Harley-Davidson at this point in time. For instance, we've identified 2 warning signs for Harley-Davidson (1 is a bit unpleasant) you should be familiar with.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com