NTZ Stock Prediction: Deep value stock appears ready for a revenue turnaround

motek 1 The stock prediction article was written by Tianyue Yu, Analyst at I Know First, Master’s candidate at Brandeis University.


  • The global market layout provides revenue turnaround opportunities in the following years.
  • Quantitative analysis results indicate bull signal after stock price topped out moving average line.
  • NTZ deserves a one-year target price of $10.6, representing a resilient revenue level and trading multiple at 0.2x.

Revenue is expected to grow, thanks to Natuzzi’s global market layout

As a furniture manufacturer with headquarter in Italy, Natuzzi (NTZ) stock didn’t gain much attention in the past several years until recently. The stock performed badly under the pandemic and went down to less than $1 earlier this year. NTZ’s primary growth strategy is to expand its product offering and retail network globally. Reflecting on the financial statement, the number of Natuzzi stores grows every year. However, the company revenue stayed a downward trend in the past two decades, which is consistent with the long-term stock price slump. During those quarters or years with positive revenue growth, stock price also slightly rebounded. Based on the historical data, revenue performance is the key reference of the NTZ stock forecast.

(Source: Natuzzi presentation)
(Source: Natuzzi Annual Reports)
NTZ stock forecast
(Source: Natuzzi annual report and Yahoo Finance)

This fluctuation pattern happened again recently. Natuzzi announced an above expectation June-to-date written orders number in the second quarterly report this year. The stock price shot up from $1.4 to $7.4 in less than a month after the quarterly report released. Investors expect a strong bounce back to the standard level of services from the pandemic situation.

Thanks to Natuzzi’s global market layout, this expectation won’t be just a dream. NTZ has higher international revenue composition, especially in the Asia region, compared with its competitors. The Core Business revenue in Asia-Pacific districts grows every year until the pandemic hit the market. As the company mentioned that the downsize of the Chinese plant has completed in the Q2 report, I predict that a turnaround of demand and supply in the Asia market will support resilient revenue performance in 2020, despite the continuous revenue decrease in America and EMEAI markets in the short-term.

The uncertainty of the US presidential election might bring up another bull news to the stock forecast

Trump’s tough tariff policy towards China since 2016 exerted pressure on the costs and expenses of the whole furniture manufacture industry. Natuzzi is currently seeking production outsourcing opportunities in Vietnam and other alternative countries. A more favorable tariff policy will improve the condition of the expense and save the company’s cash outflow.

Bollinger Bands and moving average indicators show overbought signal and further upside opportunities

Unsurprisingly, the recent stock price surge resulted in a breakout above the upper limit of Bollinger Bands. Similar to what happened at the end of 2016, I expect that NTZ stock price might adjust back into the upper band in the next several months (before the next report date). After the short-term fluctuation, the stock price will guide the upper band to go higher and the Bollinger band to go wider apart, driven by investors’ confidence in the revenue prospect. As for when will the squeeze trend begins, the timing will depend on the actual revenue performance in the following quarters.

The moving average lines also show some upside opportunities. The stock price topped out 50 periods and 200 periods MA lines in July and on October 21, respectively, and kept uptrend momentum. There is still plenty of space for the short-term moving average line to surpass the long-term one. The past stock performance indicates that the price stays at a high level for around a year after it went above the 200 periods MA line. If this trend repeatedly emerges, NTZ stock price will trend up in the next year.

NTZ stock forecast
(Source: Yahoo Finance)

Final thoughts on NTZ Stock Forecast

NTZ stock is an under-the-radar deep value stock trading at less than $10 for decades. Considering the company’s business has always been stable, there are really not many factors that can influence the stock price. Therefore, investors will be especially sensitive to certain signals in company public documents.

NTZ stock forecast

I give a buy prediction to NTZ stock price in line with the forecast results from I Know First. The target price is $10.6, representing an estimated 2020 revenue of $456.25 and an EV/Sales multiple at $0.2. In the short-term, the momentum will keep accelerating. I believe the stock price will experience some adjustments in the next several months given uncertainties of pandemic and the US presidential election, providing investors some good entry opportunities.

NTZ stock forecast

Past Success With NTZ Stock Prediction

I Know First noticed the upward trend of NTZ and has been bullish with the price since early July until now. On July 19, 2020, the I Know First algorithm recommended NTZ as one of the best stocks under $5 package picks to buy. The AI-driven NTZ stock prediction was successful on a three-month horizon resulting in more than 520% gain since the forecast date. See the chart below.

ntz stock forecast july
ntz stock forecast july chart

Additionally, on October 6, 2020, the I Know First algorithm recommended NTZ as one of the best stocks under $10 package picks to buy. The AI-driven NTZ stock prediction was successful on a three-month horizon resulting in more than 227% gain since the forecast date. See the chart below.

ntz stock forecast october
ntz stock forecast october chart

To subscribe today click here.

Please note-for trading decisions use the most recent forecast.