The stock has corrected by more than 13% over the past few weeks. Though the volumes have not been too great, the weakness remains. Perhaps there is a lot of profit booking, and the high current valuations may have led to the selling. Though many analysts are pretty bullish on the future of the stock, its high ttm P/E (68) and forward P/E of 41 have perhaps led to some concerns. The profit margin of 2.27% also indicates little room for slippages. The debt is reasonable, but the expansion plans of the company may add to this burden in the future. In any case, the investors have been rewarded by the performance of the stock. It is nearly double its offer price despite the correction. The correction may end between $24 and $25, but still there is room for more caution. The base effect will not let the company grow at a great pace in the next few quarters, and there may be some slowing of the growth. So while the stores may grow, the sales growth may not necessarily be as robust as what it has been in the past. Correction in the market will only add to the pressure. So the stock may become more range bound rather than a robust growth stock. Long term prospects will remain positive as the market for its products is expected to rise. NGVC has to remain open to new segments and attempt to leverage innovative products coming in the market. Chromadex Corporation (CDXC) recently launched a vitamin Nicotinamide Riboside (NR) which is touted to be a wonder vitamin with great future prospects. New products / segments may be required to support growth. The margins also need to be improved so that the company is able to generate enough surplus to take care of expansion needs in the future.
