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Summary
- Winmark is a high-quality company with a franchise-based business model that generates high margins and sustainable growth.
- The used goods market is expected to grow significantly, providing opportunities for Winmark to continue expanding.
- Despite concerns about valuation multiples, there is potential for the stock to appreciate, with a fair price estimate of $460 and a 26% upside.
We believe that Winmark (NASDAQ:WINA) is a very high-quality company that might look expensive at first sight but is probably still cheap. The franchise-based business model with virtually zero owned assets assures the highest possible margins and low-attrition topline growth. We are optimistic that growth is sustainable at the current pace and will support the current valuation. The overall upside potential should be around 26%.
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