The talk on the Street is that department store giant Nordstrom, Inc. (NYSE:JWN) is most likely going private sometime in the foreseeable future.

The Nordstrom family group, which collectively owns just over 31% of the 116-year-old retailer, has expressed an interest in taking the company private for some time.

Apparently, they are tired of the stock taking a classic Wall Street beating every time the department store fails to ease concerns about an Amazon.com, Inc. (NASDAQ:AMZN) led takeover of all things retail.

That is pretty much exactly what has happened over the past 3 years. In that time frame, JWN stock is down about 30%. And it doesn’t get much better if you zoom the time frame out. Over the past 5 years, JWN stock is down 18%. Over the past 10 years? It’s up just 1% (the S&P 500 is up 70% over the past 10 years).

So it makes sense why the Nordstrom family wants to take the retailer private. The Wall Street game just hasn’t worked out for them recently.

But why would any private equity firm want to step in here? After all, there is a reason the stock has only inched up 1% in 10 years. Brick-and-mortar retail is a dead duck that no one wants to touch.

Apparently, though, there is private equity interest. CNBC reports that JWN is close to partnering with PE firm Leonard Green & Partners in a deal wherein Leonard Green would provide roughly $1 billion in equity to fund the go-private deal.

That has JWN stock up about 6% on Wednesday afternoon trade. But JWN stock is still well off its 52-week highs by about 25%. It’s also still below where the stock traded just two months ago.

With the likelihood of a go-private deal as high as ever, does that mean JWN stock has more room to run? I think so.

Nordstrom Is a Quality PE Target

Private equity interest in JWN is high for two reasons: 1) The retailer is actually doing pretty well amid the rest of retail’s turmoils. 2) The stock is materially undervalued. Those two reasons mean that if a go-private deal does go through for JWN, it will likely go through at a price much higher than the current stock price.

All things considered, Nordstrom isn’t actually doing all that bad. Last quarter, analysts thought Nordstrom would report a 0.5% decline in same-store sales. But the department store actually reported a 1.7% gain in same-store sales. That is a huge beat and it comes against the backdrop of other department stores still reporting same-store sales declines.

Meanwhile, gross profits are down but not by much. Share buybacks are offsetting opex deleverage, and annual earnings power is actually fairly stable around $3 per share.

That $3 number could have material upside.

Although the market’s reaction was negative, I actually like Nordstrom’s inventory-free Nordstrom Local concept. It’s a pop shop that gives the mall-based retailer more off-mall exposure. In this sense, shopping at Nordstrom will now be more convenient than ever. As opposed to driving 30 minutes to the closest mall, your commute to try on JWN clothes will likely become much shorter.

Consequently, I think Nordstrom Local will drive substantial incremental revenues and profits for JWN. Meanwhile, it’s also worth noting that Nordstrom’s target demographic is getting wealthier and presumably has more disposable income now than ever before.

Despite these tailwinds, JWN stock is dirt cheap. It trades at a 0.6-times enterprise-value-to-sales (EV/Sales) multiple. JWN stock hasn’t been this cheap since right after the 2008 financial crisis. In fact, over the past 10 years, JWN stock has traded right around 1-times EV/Sales. That’s a 65%-plus premium to the current valuation.

The stock also trades at a 6.2-times enterprise-value-to-ebitda (EV/ebitda) multiple. For the better part of the past decade, JWN stock has traded around 7.5-times trailing ebitda. That is a 20%-plus premium to the current valuation.

By historical enterprise value metrics, then, JWN stock is more than 20% undervalued. Granted, the times in brick-and-mortar retail have changed dramatically, but JWN is doing everything right to navigate through these difficult times.

Bottom Line on JWN Stock

If it gets taken private, it will be at a much higher valuation than the one the market is currently awarding it.

All signs point to this company being taken private. And if even a go-private deal doesn’t go through, JWN is still a solid investment because the stock is cheap, comps are positive, earnings are stable, and growth catalysts are on the horizon.

All in all, there remains little reason not to buy JWN stock. That’s why I’m a buyer.

As of this writing, Luke Lango was long JWN and AMZN.