While Ethan Allen Interiors Inc. (NYSE:ETD) might not have the largest market cap around , it saw significant share price movement during recent months on the NYSE, rising to highs of US$32.42 and falling to the lows of US$27.67. 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 Ethan Allen Interiors' current trading price of US$28.18 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at Ethan Allen Interiors'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 Ethan Allen Interiors?
Good news, investors! Ethan Allen Interiors is still a bargain right now. According to our valuation, the intrinsic value for the stock is $41.20, but it is currently trading at US$28.18 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 Ethan Allen Interiors'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.
Can we expect growth from Ethan Allen Interiors?
Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. Though in the case of Ethan Allen Interiors, it is expected to deliver a negative earnings growth of -7.1%, which doesn't help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What This Means For You
Are you a shareholder? Although ETD 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 ETD, 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 ETD 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.
If you want to dive deeper into Ethan Allen Interiors, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 2 warning signs for Ethan Allen Interiors (of which 1 is concerning!) you should know about.
If you are no longer interested in Ethan Allen Interiors, 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.