Skechers U.S.A., Inc. (NYSE:SKX), is not the largest company out there, but it led the NYSE gainers with a relatively large price hike in the past couple of weeks. The company is inching closer to its yearly highs following the recent share price climb. 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. But what if there is still an opportunity to buy? Today we will analyse the most recent data on Skechers U.S.A’s outlook and valuation to see if the opportunity still exists.
View our latest analysis for Skechers U.S.A
What Is Skechers U.S.A Worth?
According to our valuation model, Skechers U.S.A seems to be fairly priced at around 8.71% above our intrinsic value, which means if you buy Skechers U.S.A today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $54.88, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Skechers U.S.A’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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 Skechers U.S.A 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. With profit expected to grow by 76% over the next couple of years, the future seems bright for Skechers U.S.A. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? It seems like the market has already priced in SKX’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on SKX, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
So while earnings quality is important, it’s equally important to consider the risks facing Skechers U.S.A at this point in time. At Simply Wall St, we found 1 warning sign for Skechers U.S.A and we think they deserve your attention.
If you are no longer interested in Skechers U.S.A, 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.
