V.F. Corporation (NYSE:VFC), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the NYSE over the last few months. The company is now trading at yearly-high levels following the recent surge in its share price. 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. However, could the stock still be trading at a relatively cheap price? Today we will analyse the most recent data on V.F's outlook and valuation to see if the opportunity still exists.
What's The Opportunity In V.F?
According to our valuation model, V.F seems to be fairly priced at around 14% below our intrinsic value, which means if you buy V.F today, you'd be paying a reasonable price for it. And if you believe that the stock is really worth $23.12, then there's not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that V.F'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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of V.F look like?
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 relatively muted revenue growth of 3.0% expected over the next couple of years, growth doesn't seem like a key driver for a buy decision for V.F, at least in the short term.
What This Means For You
Are you a shareholder? It seems like the market has already priced in VFC's future outlook, with shares trading around its fair value. However, there are also other important factors which we haven't considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you've been keeping an eye on VFC, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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.
Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For instance, we've identified 2 warning signs for V.F (1 can't be ignored) you should be familiar with.
If you are no longer interested in V.F, 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.