Bassett Furniture (BSET) Company Overview & Stock Price Forecast
This article provides a brief analysis and stock rating for Bassett Furniture (BSET) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.
Bassett Furniture Fundamentals
Stock Price Target: $31.29
In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for Bassett Furniture in comparison to the Home Furnishings industry and the S&P 500.
Bassett Furniture is a Small Cap company with a Market Cap of $135.6M.
How are investors using Bassett Furniture earnings yield to assess the company?
The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).
The current earnings yield for Bassett Furniture is 12.25%, in comparison to 3.99% for the S&P 500 and 1.75% for the 10-year treasury bond. The median earnings yield for the Home Furnishings industry is 12.38%.
What does Bassett Furniture Price-to-Earnings Ratio (P/E) tell investors about the company?
The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings.
Bassett Furniture is currently trading at a P/E of 6.86. The P/E for the Home Furnishing industry is 10.87 and the P/E for the S&P 500 is 25.08.
What is the current Price-to-Sales Ratio (P/S) for Bassett Furniture?
The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.
Bassett Furniture is currently trading at a P/S of 0.35. The P/S for the Home Furnishing industry is 1.05 and the P/S for the S&P 500 is 3.01.
How does Bassett Furniture Price-to-BookRatio (P/B) compare to the Home Furnishings industry?
Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.
Bassett Furniture P/B ratio is 0.85. The P/B for the Home Furnishing industry is 2.86 and the P/B for the S&P 500 is 4.54.
How attractive is Bassett Furniture Return on Invested Capital (ROIC) to investors?
Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.
Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.
Bassett Furniture ROIC is currently 7.31% in comparison to 15.12% for the Home Furnishing industry and 9.10% for the S&P 500.
How has BSET stock performed over the past year? What is the current analyst price target?
Over the past 52 weeks, Bassett Furniture has traded between the range of $13.51 and $37.
The current Analyst Price Target for Bassett Furniture is $31.29.
What is Bassett Furniture YOY Performance in comparison to its industry and the total market?
The YOY performance for Bassett Furniture is -39.34%. The Home Furnishing industry has a YOY performance of 9.05% in comparison to the YOY S&P 500 performance of 14.80%.
Recent Financial Results (Q3, 2021)
- Consolidated revenue of $118.9M for the quarter, an increase of 30% compared to 2020 and 8.7% more than 2019
- Operating income of $4.5M, 63% more than the same period in 2020 and 32% more than in 2019
- EPS of $0.31 per share against the $0.22 recorded in 2020
- Quarterly wholesale revenue grew by 32% compared to 2020 and by 17% to 2019
Stock Price Target: $31.29
Bassett Furniture Industries engages in the manufacture, marketing, and retail of home furnishings in the US and internationally. It operates in three segments: Wholesale, Retail –company-owned Stores, and Logistical Services.
The company distributes furniture products to a network of company-owned retail stores and licensee-owned stores, and independent furniture retailers; and wood and upholstery operations. As of November 2020, it operated a network of 63 company-owned stores and 34 licensee-owned stores.
Bassett Furniture also provides shipping, and warehousing services to customers in the furniture industry. The company owns and leases retail store properties; and distributes its products through other multi-line furniture stores, Bassett galleries or design centers, mass merchants, and specialty stores, as well as sells its products online.
Bassett Furniture was founded in 1902 and is based in Bassett, Virginia. The current CEO is Robert Spilman Jr.
This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.