In This Article:
LCI Industries (NYSE:LCII), is not the largest company out there, but it saw significant share price movement during recent months on the NYSE, rising to highs of US$111 and falling to the lows of US$75.07. 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 LCI Industries' current trading price of US$77.39 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at LCI Industries’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is LCI Industries Still Cheap?
According to our price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 13.67x is currently trading slightly above its industry peers’ ratio of 12.95x, which means if you buy LCI Industries today, you’d be paying a relatively sensible price for it. And if you believe LCI Industries should be trading in this range, then there isn’t really any room for the share price grow beyond the levels of other industry peers over the long-term. Is there another opportunity to buy low in the future? Since LCI Industries’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.
View our latest analysis for LCI Industries
Can we expect growth from LCI Industries?
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. With profit expected to grow by 41% over the next couple of years, the future seems bright for LCI Industries. 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? LCII’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. 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 LCII? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?