Sally Beauty Holdings (SBH) is drawing attention after announcing ion 24K, a hair care line built around molecular technology, along with plans for new ion styling tools set for early spring.
See our latest analysis for Sally Beauty Holdings.
The ion 24K launch and upcoming styling tools come at a time when sentiment around Sally Beauty has been improving, with a 30 day share price return of 5.04% and a 1 year total shareholder return of 44.95%, signalling building momentum despite a weaker 3 year total shareholder return of 12.23%.
If this kind of product driven story has your attention, it could be worth widening your lens to see how other fast growing stocks with high insider ownership are shaping up right now.
With shares up 44.95% over the past year and trading at a 13% discount to the US$17.20 average analyst target, plus an estimated 41% intrinsic discount, you have to ask: is there still value here, or is the market already recognising future growth?
Most Popular Narrative: 6.3% Undervalued
Compared to the last close of $15.22, the most followed narrative pegs Sally Beauty Holdings at a fair value of $16.25, suggesting modest upside still on the table.
Ongoing cost structure optimization through the Fuel for Growth program is delivering significant SG&A and gross margin savings, enabling both reinvestment in growth initiatives and direct improvement to net margins and earnings over the next several years.
Curious how steady revenue assumptions, margin tweaks, and a future earnings multiple come together to justify that fair value? The full narrative spells out the math and the trade offs.
The narrative builds its $16.25 view using an 11.3% discount rate and a modest growth profile for both sales and earnings, rather than aggressive blue sky scenarios. It also factors in a slightly higher future P/E multiple than today, plus ongoing share count reductions, to reach its valuation. Taken together, those ingredients underpin the view that Sally Beauty is trading at a small discount, not a deep value outlier.
Result: Fair Value of $16.25 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, you still need to factor in risks such as slower ecommerce adoption and pressure from larger beauty retailers, which could challenge revenue, margins, and that fair value case.
Find out about the key risks to this Sally Beauty Holdings narrative.
Build Your Own Sally Beauty Holdings Narrative
If you look at the numbers and come to a different conclusion, or prefer to run your own checks, you can build a custom thesis in minutes by starting with Do it your way.
A great starting point for your Sally Beauty Holdings research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
Looking for more investment ideas?
If Sally Beauty has you thinking more broadly about where to put your money to work, do not stop here. Widen your search before the next move passes you by.
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.
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