Yahoo Finance Is It Too Late To Consider Buying Coca-Cola Consolidated, Inc. (NASDAQ:COKE)?
Coca-Cola Consolidated, Inc. (NASDAQ:COKE), might not be a large cap stock, but it saw a significant share price rise of over 20% in the past couple of months on the NASDAQGS. As a US$5.8b market-cap stock, it seems odd Coca-Cola Consolidated is not more well-covered by analysts. Although, there is more of an opportunity for mispricing in stocks with low coverage, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine Coca-Cola Consolidated’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
See our latest analysis for Coca-Cola Consolidated
Is Coca-Cola Consolidated still cheap?
Good news, investors! Coca-Cola Consolidated is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. I’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 24.36x is currently well-below the industry average of 34.18x, meaning that it is trading at a cheaper price relative to its peers. Coca-Cola Consolidated’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its industry peers, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What does the future of Coca-Cola Consolidated look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. However, with a relatively muted revenue growth of 5.2% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Coca-Cola Consolidated, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since COKE is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping an eye on COKE for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy COKE. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed assessment.
In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Every company has risks, and we've spotted 3 warning signs for Coca-Cola Consolidated you should know about.
If you are no longer interested in Coca-Cola Consolidated, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
