La-Z-Boy Incorporated (NYSE:LZB), might not be a large cap stock, but it saw a significant share price rise of 28% in the past couple of months on the NYSE. The recent jump in the share price has meant that the company is trading at close to its 52-week high. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let's take a look at La-Z-Boy's outlook and value based on the most recent financial data to see if the opportunity still exists.
What Is La-Z-Boy Worth?
Great news for investors – La-Z-Boy is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $48.23, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because La-Z-Boy'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 kind of growth will La-Z-Boy generate?
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 profit growth of 10.0% expected over the next couple of years, growth doesn't seem like a key driver for a buy decision for La-Z-Boy, at least in the short term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since LZB is currently undervalued, it may be a great time to accumulate more of 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 LZB 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 LZB. 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.
If you'd like to know more about La-Z-Boy as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 1 warning sign for La-Z-Boy you should be aware of.
If you are no longer interested in La-Z-Boy, 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.