Steelcase Inc (SCS, Financial) has seen a daily gain of 24.4% and a 3-month gain of 21.23%. With an Earnings Per Share (EPS) (EPS) of 0.41, the question arises: is the stock modestly undervalued? This article aims to answer this question through a thorough valuation analysis. We encourage readers to delve into the following sections to gain a more comprehensive understanding of Steelcase's intrinsic value.
Company Introduction
Steelcase Inc is a leading furniture company primarily based in the United States with operations extending to Europe, the Middle East, and Africa. The company markets its products primarily through a network of independent and company-owned dealers. Steelcase operates through the Americas segment, the EMEA segment, and the Other category. The Americas segment offers architecture, furniture, and technology products marketed to corporate, government, healthcare, education, and retail customers. The EMEA segment provides furniture systems, storage, and seating solutions. The majority of the revenue is generated from the Americas segment.
Steelcase's stock price currently stands at $10.96, while its GF Value, an estimation of fair value, is at $13.26. This comparison sets the stage for a deeper exploration of the company's value.
Understanding the GF Value
The GF Value represents the current intrinsic value of a stock derived from our exclusive method. The GF Value Line on our summary page gives an overview of the fair value that the stock should be traded at. It is calculated based on three factors:
- Historical multiples (PE Ratio, PS Ratio, PB Ratio, and Price-to-Free-Cash-Flow) that the stock has traded at.
- GuruFocus adjustment factor based on the company's past returns and growth.
- Future estimates of the business performance.
We believe the GF Value Line is the fair value that the stock should be traded at. If the stock price is significantly above the GF Value Line, it is overvalued, and its future return is likely to be poor. Conversely, if it is significantly below the GF Value Line, its future return will likely be higher.
Steelcase's stock gives every indication of being modestly undervalued based on GuruFocus' valuation method. The GF Value estimates the stock's fair value based on three key factors: historical multiples, an internal adjustment based on the company's past business growth, and analyst estimates of future business performance. If the share price is significantly above the GF Value Line, the stock may be overvalued and have poor future returns. On the other hand, if the share price is significantly below the GF Value calculation, the stock may be undervalued and have higher future returns.
At its current price of $10.96 per share, Steelcase stock gives every indication of being modestly undervalued. Because Steelcase is relatively undervalued, the long-term return of its stock is likely to be higher than its business growth.
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