Yahoo Finance At US$5.56, Is It Time To Put Vera Bradley, Inc. (NASDAQ:VRA) On Your Watch List?
Vera Bradley, Inc. (NASDAQ:VRA), might not be a large cap stock, but it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine Vera Bradley’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
See our latest analysis for Vera Bradley
What Is Vera Bradley Worth?
According to my valuation model, Vera Bradley seems to be fairly priced at around 0.79% above my intrinsic value, which means if you buy Vera Bradley today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $5.52, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Vera Bradley’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 does the future of Vera Bradley 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. 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 revenue growth of 0.6% expected in the upcoming year, short term growth doesn’t seem like a key driver for a buy decision for Vera Bradley.
What This Means For You
Are you a shareholder? It seems like the market has already priced in VRA’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on VRA, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.
Diving deeper into the forecasts for Vera Bradley mentioned earlier will help you understand how analysts view the stock going forward. At Simply Wall St, we have the analysts estimates which you can view by clicking here.
If you are no longer interested in Vera Bradley, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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