1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS), is not the largest company out there, but it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. As a stock with high coverage by analysts, you could assume any recent changes in the company's outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let's examine 1-800-FLOWERS.COM's valuation and outlook in more detail to determine if there's still a bargain opportunity.
Check out our latest analysis for 1-800-FLOWERS.COM
Is 1-800-FLOWERS.COM Still Cheap?
The stock seems fairly valued at the moment according to my valuation model. It's trading around 3.95% above my intrinsic value, which means if you buy 1-800-FLOWERS.COM today, you'd be paying a relatively reasonable price for it. And if you believe the company's true value is $8.31, then there isn't really any room for the share price grow beyond what it's currently trading. Although, there may be an opportunity to buy in the future. This is because 1-800-FLOWERS.COM'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 1-800-FLOWERS.COM 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. Though in the case of 1-800-FLOWERS.COM, it is expected to deliver a negative revenue growth of -2.9% next year, 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? Currently, FLWS appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you've been keeping an eye on FLWS for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there's less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven't considered today, which can help gel your views on FLWS should the price fluctuate below its true value.
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. At Simply Wall St, we found 1 warning sign for 1-800-FLOWERS.COM and we think they deserve your attention.
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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.