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What Does Shoe Carnival, Inc.'s (NASDAQ:SCVL) Share Price Indicate?

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Simply Wall St
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Shoe Carnival, Inc. (NASDAQ:SCVL), which is in the specialty retail business, and is based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Shoe Carnival’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Shoe Carnival

What is Shoe Carnival worth?

According to my valuation model, Shoe Carnival seems to be fairly priced at around 14.52% above my intrinsic value, which means if you buy Shoe Carnival today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $32.33, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Shoe Carnival’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Shoe Carnival?

NasdaqGS:SCVL Past and Future Earnings, January 14th 2020
NasdaqGS:SCVL Past and Future Earnings, January 14th 2020

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 a double-digit 17% over the next couple of years, the outlook is positive for Shoe Carnival. 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? SCVL’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 track record of its management team. 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?

Are you a potential investor? If you’ve been keeping an eye on SCVL, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Shoe Carnival. You can find everything you need to know about Shoe Carnival in the latest infographic research report. If you are no longer interested in Shoe Carnival, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.