VOXX International Corporation (NASDAQ:VOXX), isn’t the biggest company, but it has seen decent growth in the teen-level stock price on the NASDAQGS over the past few months. Less hedged, small caps see 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 compared to its true value? Today, I will be analyzing the most recent outlook and valuation data for VOXX International to see if the opportunity still exists.
Check out our latest analysis for VOXX International
Is VOXX International always cheap?
The stock price looks reasonable at the moment based on my multiple price model, where I compare the company’s price-earnings ratio to the industry average. In this case, I used the Price/Earnings (PE) ratio since there is not enough information to reliably predict the stock’s cash flow. I find that VOXX International’s ratio of 9.03x trades slightly below the 10.4x ratio of its industry peers, which means that if you buy VOXX International today, you will pay a reasonable price for it . And if you think VOXX International should be trading within this range, then there’s not much room for the stock price to rise above the levels of other industry peers over the long term. Although there may be an opportunity to buy in the future. This is because VOXX International’s beta (a measure of stock price volatility) is high, which means that its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s stock will likely fall more than the rest of the market, providing an excellent buying opportunity.
Can we expect growth from VOXX International?
Investors looking for portfolio growth may want to consider a company’s prospects before buying its stock. Buying a big company with solid prospects at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Although in the case of VOXX International, it is expected to post negative earnings growth of -4.9%, which does not help bolster its investment thesis. It seems that the risk of future uncertainty is high, at least in the short term.
What does this mean to you :
Are you a shareholder? VOXX’s price currently looks close to its industry peers, but given the uncertainty of negative returns going forward, this could be a good time to de-risk your portfolio. Is your current exposure to the security optimal for your entire portfolio? And is the opportunity cost of holding a stock with a negative outlook too high? Before making a decision on VOXX, check if its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on VOXX for a while, now might not be the most optimal time to buy, given that it’s trading around industry price multiples. This means that there is less benefit from erroneous prices. Additionally, the negative growth outlook increases the risk of owning the stock. However, there are also other important factors that we have not considered today that can help crystallize your opinion on VOXX if the price fluctuates below the industry PE ratio.
Diving deeper into the previously mentioned VOXX International forecasts will help you understand how analysts view the stock going forward. Luckily, you can check analyst forecasts by clicking here.
If you are no longer interested in VOXX International, you can use our free platform to view our list of over 50 other stocks with high growth potential.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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