While National Vision Holdings, Inc. (NASDAQ:EYE) might not have the largest market cap around , it saw a significant share price rise of 28% in the past couple of months on the NASDAQGS. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the 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 take a look at National Vision Holdings's outlook and value based on the most recent financial data to see if the opportunity still exists.
What Is National Vision Holdings Worth?
The stock is currently trading at US$19.83 on the share market, which means it is overvalued by 35% compared to our intrinsic value of $14.74. This means that the opportunity to buy National Vision Holdings at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that National Vision Holdings'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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of National Vision Holdings look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 an expected decline of -4.3% in revenues over the next couple of years, near-term growth certainly doesn't appear to be a driver for a buy decision for National Vision Holdings. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? If you believe EYE is currently trading above its value, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the uncertainty from negative growth in the future, this could be the right time to reduce your total portfolio risk. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you've been keeping an eye on EYE for a while, now may not be the best time to enter into the stock. The company's price climbed passed its true value, in addition to a risky future outlook. However, there are also other important factors which we haven't considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?
Diving deeper into the forecasts for National Vision Holdings mentioned earlier will help you understand how analysts view the stock going forward. So feel free to check out our free graph representing analyst forecasts.
If you are no longer interested in National Vision 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.