Is it too late to consider buying BlueLinx Holdings Inc. (NYSE: BXC)?

BlueLinx Holdings Inc. (NYSE: BXC), may not be a large-cap stock, but its price has seen some significant moves over the past few months on the New York Stock Exchange, reaching a high of US$131 and a low of US$99.88. Certain stock price movements can give investors a better opportunity to enter the stock and potentially buy at a lower price. One question that needs to be answered is whether BlueLinx Holdings’ current price of US$103 reflects the true value of the small cap? Or is it currently undervalued, giving us an opportunity to buy? Let’s take a look at BlueLinx Holdings’ outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for BlueLinx Holdings

Is BlueLinx Holdings Still Cheap?

The stock price looks reasonable at the moment according to our price multiple model, in which we compare the company’s price-to-earnings ratio to the industry average. In this case, we used the price-to-earnings (PE) ratio because there is not enough information to reliably forecast the stock’s cash flows. We see that BlueLinx Holdings’s ratio of 18.42x is trading slightly above its industry peers’ ratio of 17.82x, which means if you buy BlueLinx Holdings today, you’ll be paying a relatively reasonable price. And if you think BlueLinx Holdings should trade in this range, then there isn’t really much room for the stock price to rise beyond the levels of other industry peers over the long term. Is there another opportunity to buy low in the future? Since BlueLinx Holdings’ stock price is quite volatile, we could potentially see it fall (or rise) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator of how the stock is doing relative to the rest of the market.

What does the future look like for BlueLinx Holdings?

Investors looking for growth in their portfolio may want to consider a company’s prospects before buying its shares. Buying a great company with a strong outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With earnings expected to rise 33% over the next year, the near-term future looks bright for BlueLinx Holdings. It looks like higher cash flow is on the cards for the stock, which should translate into a higher share valuation.

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What this means for you

Are you a shareholder? It appears the market has already priced in BXC’s positive outlook, with shares trading around industry price multiples. However, there are also other important factors that we haven’t considered today, such as the financial strength of the company. Have these factors changed since you last reviewed BXC? Will you have enough conviction to buy if the price fluctuates below the industry PE ratio?

Are you a potential investor? If you’re watching BXC, now may not be the most advantageous time to buy, given that it’s trading around industry price multiples. However, the positive outlook is encouraging for BXC, meaning it is worth taking a closer look at other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dig deeper into BlueLinx Holdings, you’ll also look at the risks it currently faces. For example – BlueLinx Holdings has 3 warning signs we think you should be aware of this.

If you are no longer interested in BlueLinx Holdings, you can use our free platform to view our list of over 50 other stocks with high growth potential.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to constitute financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your objectives or your financial situation. Our goal is to provide you with targeted, long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.