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At US$88.23, Is It Time To Put Columbia Sportswear Company (NASDAQ:COLM) On Your Watch List?

Simply Wall St
Updated ·3 min read

Columbia Sportswear Company (NASDAQ:COLM), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$97.40 at one point, and dropping to the lows of US$85.24. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Columbia Sportswear's current trading price of US$88.23 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Columbia Sportswear’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Columbia Sportswear

What Is Columbia Sportswear Worth?

According to my valuation model, Columbia Sportswear seems to be fairly priced at around 15% below my intrinsic value, which means if you buy Columbia Sportswear today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $103.72, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Columbia Sportswear’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of Columbia Sportswear look like?

earnings-and-revenue-growth
earnings-and-revenue-growth

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. 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. With profit expected to grow by 34% over the next couple of years, the future seems bright for Columbia Sportswear. 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? COLM’s optimistic future growth appears to have been factored into the current share price, 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 conviction to buy should the price fluctuates below the true value?

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Are you a potential investor? If you’ve been keeping tabs on COLM, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into 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 Columbia Sportswear at this point in time. For example - Columbia Sportswear has 1 warning sign we think you should be aware of.

If you are no longer interested in Columbia Sportswear, 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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