JB Hi-Fi Limited (ASX:JBH), is not the largest company out there, but it saw a significant share price rise of 21% in the past couple of months on the ASX. The company is now trading at yearly-high levels following the recent surge in its share price. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at JB Hi-Fi’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for JB Hi-Fi

Is JB Hi-Fi Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 1.03% above our intrinsic value, which means if you buy JB Hi-Fi today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth A$67.21, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, JB Hi-Fi has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will JB Hi-Fi generate?

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. Though in the case of JB Hi-Fi, it is expected to deliver a negative earnings growth of -8.2%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Currently, JBH appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on JBH for a while, now may not be the most optimal 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. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on JBH should the price fluctuate below its true value.