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When Should You Buy TriCo Bancshares (NASDAQ:TCBK)?

Simply Wall St

TriCo Bancshares (NASDAQ:TCBK), operating in the financial services industry based in United States, saw a decent share price growth in the teens level on the NASDAQGS over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine TriCo Bancshares’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for TriCo Bancshares

What's the opportunity in TriCo Bancshares?

Good news, investors! TriCo Bancshares is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $62.91, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Another thing to keep in mind is that TriCo Bancshares’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What does the future of TriCo Bancshares look like?

NasdaqGS:TCBK Past and Future Earnings, January 16th 2020

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a negative profit growth of -2.5% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for TriCo Bancshares. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? Although TCBK is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to TCBK, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on TCBK for some time, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

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

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.

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. Thank you for reading.