Mohawk Industries, Inc. (NYSE:MHK), is not the largest company out there, but it saw a significant share price rise of 35% in the past couple of months on the NYSE. While good news for shareholders, the company has traded much higher in the past year. 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? Let's examine Mohawk Industries's valuation and outlook in more detail to determine if there's still a bargain opportunity.
View our latest analysis for Mohawk Industries
Is Mohawk Industries Still Cheap?
Good news, investors! Mohawk Industries is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is $143.46, but it is currently trading at US$104 on the share market, meaning that there is still an opportunity to buy now. What's more interesting is that, Mohawk Industries's share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of Mohawk Industries 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 6.3% expected over the next couple of years, growth doesn't seem like a key driver for a buy decision for Mohawk Industries, at least in the short term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since MHK is currently undervalued, it may be a great time to increase your holdings in the stock. 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 MHK for a while, now might be the time to enter the stock. Its future outlook isn't fully reflected in the current share price yet, which means it's not too late to buy MHK. 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 investment decision.
Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. In terms of investment risks, we've identified 1 warning sign with Mohawk Industries, and understanding this should be part of your investment process.
If you are no longer interested in Mohawk Industries, 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.