Qurate Retail, Inc. (NASDAQ: QRTE.A), is not the largest company in the market, but it has received a lot of attention due to a substantial price movement on the NASDAQGS in recent months, hitting US $ 13.31 at one point, and dropping to a low of US $ 10.00. Certain movements in stock prices can give investors a better opportunity to get into the stock, and potentially buy at a lower price. One question to be answered is whether Qurate Retail‘s current trading price of US $ 10.49 reflects the true value of the mid-cap? Or is it currently undervalued, giving us the opportunity to buy? Let’s take a look at the outlook and value of Qurate Retail based on the most recent financial data to see if there are any catalysts for a price change.
Is Qurate Retail still cheap?
Good news, investors! Qurate Retail is still a good deal at the moment under my multiple pricing model, which compares the company’s price-to-earnings ratio to the industry average. In this case, I used the price-to-earnings (PE) ratio since there isn’t enough information to reliably forecast the stock’s cash flow. I find Qurate Retail’s ratio of 2.98x to be lower than its peer average of 32.5x, indicating that the stock is trading below the price of the retail industry in line. However, given that Qurate Retail’s stock is quite volatile (i.e. its price movements are amplified relative to the rest of the market), this could mean that the price may go down, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator of stock price volatility.
What does the future of Qurate Retail look like?
NasdaqGS: QRTE.A Profits and Revenue Growth October 4, 2021
Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking to grow your portfolio. Buying a large business with a solid outlook for a cheap price is always a good investment, so let’s take a look at the future expectations of the business as well. Although in the case of Qurate Retail it is expected to post very negative earnings growth over the next few years, which does not help to strengthen its investment thesis. The risk of future uncertainty appears to be high, at least in the short term.
What this means for you:
Are you a shareholder? Although QRTE.A is currently trading below the industry PE ratio, the outlook for negative earnings brings with it some uncertainty, which equates to higher risk. I recommend that you think about whether you want to increase your portfolio’s exposure to QRTE.A, or whether diversifying into another stock may be a better decision for your total risk and return.
Are you a potential investor? If you’ve been keeping your eye on QRTE.A for a while, but hesitant to take the plunge, I recommend that you do some more research on the stock. Given its current price multiple, now is the time to make a decision. But keep in mind the risks that come with negative growth prospects going forward.
If you want to dive deeper into Qurate Retail, you will also take a look at the risks it currently faces. For example, we have identified 5 warning signs for Qurate Retail (1 cannot be ignored) that you should be familiar with.
If you are no longer interested in Qurate Retail, 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 using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.