At US $ 106, is it time to put Floor & Decor Holdings, Inc. (NYSE: FND) on your watchlist?
Today we’ll take a look at the well-established Floor & Decor Holdings, Inc. (NYSE: FND). The company’s stock has seen a double-digit share price rise of more than 10% in the past two months on the NYSE. With many analysts covering large cap stocks, we can expect any price sensitive announcement to have already factored into the share price. But what if there is still a buying opportunity? Today, I’m going to analyze the most recent outlook and valuation data from Floor & Decor Holdings to see if the opportunity still exists.
Check out our latest review for Floor & Decor Holdings
What is the opportunity in Floor & Decor Holdings?
Floor & Decor Holdings appears to be expensive based on my multiple pricing model, which compares the company’s price / earnings ratio to the industry average. In this case, I used the price-to-earnings (PE) ratio since there isn’t enough information to reliably forecast the stock’s cash flow. I find Floor & Decor Holdings’ 46.72x ratio to be higher than its peers average of 14.48x, which suggests that the stock is trading at a higher price than the sell industry. specialized retail. If you like the action, you might want to keep an eye out for potential price drops in the future. Since Floor & Decor Holdings stock is quite volatile (i.e. its price movements are amplified relative to the rest of the market), this could mean that the price may go down, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator of stock price volatility.
What kind of growth will Floor & Decor Holdings generate?
Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking to grow your portfolio. While value investors argue that intrinsic value versus price matters most, a more compelling investment thesis would be high growth potential at a cheap price. With earnings expected to grow 76% over the next two years, the future looks bright for Floor & Decor Holdings. It looks like a higher cash flow is expected for the stock, which should fuel a higher valuation of the stock.
What this means for you:
Are you a shareholder? FND’s bullish future growth appears to have been factored into the current stock price, with stocks trading above industry price multiples. At this current price, shareholders may ask a different question: should I sell? If you think FND should trade below its current price, selling high and buying it back when its price drops towards the industry PE ratio can be profitable. But before you make that decision, check to see if its fundamentals have changed.
Are you a potential investor? If you’ve been keeping your eye on FND for a while, it might not be the best time to enter the stock. The price has surpassed its industry peers, which means there is likely to be no more benefit due to poor pricing. However, the bullish outlook is encouraging for FND, which means that it is worth exploring other factors in order to profit from the next price drop.
If you want to learn more about Floor & Decor Holdings, you should also consider the risks it currently faces. During our analysis, we found that Floor & Decor Holdings has 2 warning signs and it would be unwise to ignore them.
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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
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