What Is Dillard's, Inc.'s (NYSE:DDS) Share Price Doing?
While Dillard's, Inc. (NYSE:DDS) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price increase on the NYSE over the last few months. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today I will analyse the most recent data on Dillard's’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for Dillard's
What is Dillard's worth?
According to my valuation model, Dillard's seems to be fairly priced at around 12.86% above my intrinsic value, which means if you buy Dillard's today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $27.72, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Dillard's’s low beta implies that the stock is less volatile than the wider market.
What does the future of Dillard's 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 36% over the next year, the near-term future seems bright for Dillard's. 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? DDS’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 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 DDS, now may not be the most optimal 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 if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For instance, we've identified 3 warning signs for Dillard's (2 are potentially serious) you should be familiar with.
If you are no longer interested in Dillard's, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
This article by Simply Wall St is general in nature. 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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