Acushnet Holdings Corp. (NYSE:GOLF), 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 recent share price gains has brought the company back closer to its yearly peak. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company's outlook is already priced into the stock. However, what if the stock is still a bargain? Today we will analyse the most recent data on Acushnet Holdings's outlook and valuation to see if the opportunity still exists.
Is Acushnet Holdings Still Cheap?
The stock seems fairly valued at the moment according to our valuation model. It's trading around 1.0% below our intrinsic value, which means if you buy Acushnet Holdings today, you'd be paying a reasonable price for it. And if you believe the company's true value is $63.96, then there isn't much room for the share price grow beyond what it's currently trading. What's more, Acushnet Holdings's share price may be more stable over time (relative to the market), as indicated by its low beta.
What does the future of Acushnet Holdings look like?
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. 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 negative profit growth of -6.3% expected over the next couple of years, near-term growth certainly doesn't appear to be a driver for a buy decision for Acushnet Holdings. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Currently, GOLF 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 optimal 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 tabs on GOLF 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 GOLF should the price fluctuate below its true value.
If you want to dive deeper into Acushnet Holdings, you'd also look into what risks it is currently facing. For instance, we've identified 3 warning signs for Acushnet Holdings (1 makes us a bit uncomfortable) you should be familiar with.
If you are no longer interested in Acushnet Holdings, 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.