Floor & Decor Stock Looks Like a Good Pick for Bears

FND options are looking affordable right now

facebook X logo linkedin


Floor & Decor Holdings, Inc. (NYSE:FND) is a multi-channel specialty retailer and commercial flooring distributor. The retailer operates 153 warehouse-format stores and two design studios in the United States. FND offers a broad assortment of in-stock hard-surface flooring, including tile, wood, laminate, vinyl, and natural stone along with decorative and installation accessories. This afternoon, FND is trading down 1.8% at $129.21.

Floor & Decor stock has increased about 48% year-over-year and has tacked on 59% since dropping to its 52-week low of $81.20 in early March. Additionally, shares of FND have grown 30% year-to-date, but have shed 11% since hitting its all-time peak of $145.89 on Nov. 4.

From a fundamental point of view, Floor & Decor stock is priced very richly with a market cap of $13.9 billion. At its current valuation, FND's price-earnings ratio comes in at an inflated 47.76 and its price-sales ratio comes in at a relatively high 4.35. In addition, FND has a forward price-earnings ratio of 44.64, which signals an expected growth in earnings while still being extremely high for a company in the retail sector. Floor & Decor also has $330 million in cash and $1.4 billion in total debt on their balance sheet, which could hinder its long-term potential growth rate.

Overall, the biggest concern with Floor & Decor stock lies is its valuation, but  FND could still potentially be a long-term winner. Nonetheless, investors will likely want to see Floor & Decor stock drop fairly substantially in price before buying shares any time soon. Plus, there looks to be room for downgrades, with 12 of the 14 analysts in coverage sporting a "strong buy" recommendation. 

Regardless, FND looks like an affordable pick of options traders. This is per the equity's Schaeffer's Volatility Index (SVI) of 40% sits higher than just 35% of readings from the last 12 months. This means options players are pricing in low volatility expectations for the equity right now.

 

Unlock Weekend Profits with Chris Prybal's Favorite Strategy Up +487.5% in 2024

With the markets going left, right, and sideways, you need to have a plan now more than ever. 

Expert Trader Chris Prybal is no stranger to volatility, and has mastered finding big stock rallies while other traders aren't looking over the weekend. Rallies that produced gains like +207% on RTX calls, +236% on MARA calls, and +238% on NET calls.

A few simple moves on Sunday at 7pm could be the “Secret Sauce” your portfolio needs to not just stay afloat, but make unprecedented gains in this turbulent market.


Don’t sit on the sidelines, beat the market with Chris Prybal's strategy. Join him now!

 

 
 
 


 
 

Rainmaker Ads CGI