What Does NEXT plc (LON:NXT), Share Price Do?

While NEXT plcLON:NXTWhile it may not be the most popular stock right now, the LSE’s significant price increase over the past few months has attracted a lot of attention to it. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. The stock could still be selling at a low price. Let’s examine NEXT’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for NEXT

What’s Next?

According to my valuation model, NEXT seems to be fairly priced at around 16% below my intrinsic value, which means if you buy NEXT today, you’d be paying a fair price for it. And if you believe the company’s true value is £78.13, then there isn’t much room for the share price grow beyond what it’s currently trading. Do you see another chance to buy low? Since NEXT’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 due to its high beta which is an indicator of how the stock is performing relative to other stocks.

What kind of growth can NEXT produce?

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. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of NEXT, it is expected to deliver a negative earnings growth of -12%, which doesn’t help build up its investment thesis. The risk of future uncertainty seems high at least for the short term.

This is What It Means for You

Are you a shareholder? NXT is currently trading at around its fair price. But, considering the potential for negative future returns, now could be the time to reduce your portfolio’s exposure to the stock. Are you maximizing the benefits of your stock-related exposure for your overall portfolio? Are there too many risks associated with holding a stock that has a negative outlook? Before making a decision about the stock, consider whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on NXT for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. The stock’s risk of losing money is increased by the negative outlook for growth. However, there are also other important factors we haven’t considered today, which can help gel your views on NXT should the price fluctuate below its true value.

It’s important to understand the risks involved in buying this stock if you plan to do so. This is an example of what we’ve done: 3 warning signs for NEXT There are several things to be aware of, and one should not be overlooked.

If you don’t want to be involved in NEXT anymore, you can use our platform for free to see our entire list of over 50 other stocks with a high growth potential.

Give feedback about this article Are you concerned about the content? Get in touch Get in touch with us. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St has a general nature. Our commentary is based on historical data, analyst forecasts and other unbiased information. We do not intend to provide financial advice. It is not a recommendation not to buy or sell any stocks and it doesn’t take into account your financial situation or objectives. Our goal is to provide you with long-term, focused analysis based on fundamental data. Please note that our analysis might not include the most recent announcements from price-sensitive companies or qualitative material. Simply Wall St does not hold any position in the stocks mentioned.

Participate in a Paid User Research Session
You’ll receive a Amazon Gift Card – US$30 Spend an hour helping us to create better tools for individual investors. Sign up here