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When Should You Buy Hilton Worldwide Holdings Inc. (NYSE:HLT)?

Simply Wall St

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Today we're going to take a look at the well-established Hilton Worldwide Holdings Inc. (NYSE:HLT). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Hilton Worldwide Holdings’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Hilton Worldwide Holdings

What's the opportunity in Hilton Worldwide Holdings?

Good news, investors! Hilton Worldwide Holdings is still a bargain right now. According to my valuation, the intrinsic value for the stock is $124.75, but it is currently trading at US$93.03 on the share market, meaning that there is still an opportunity to buy now. However, given that Hilton Worldwide Holdings’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Hilton Worldwide Holdings generate?

NYSE:HLT Past and Future Earnings, June 14th 2019

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 57% over the next couple of years, the future seems bright for Hilton Worldwide Holdings. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? Since HLT is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on HLT for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy HLT. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Hilton Worldwide Holdings. You can find everything you need to know about Hilton Worldwide Holdings in the latest infographic research report. If you are no longer interested in Hilton Worldwide Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.