At CA$223, Is FirstService Corporation (TSE:FSV) Worth Looking At Closely?
FirstService Corporation (TSE:FSV), is not the largest company out there, but it saw a decent share price growth of 12% on the TSX over the last few months. The recent jump in the share price has meant that the company is trading around its 52-week high. With many analysts covering the mid-cap 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 take a look at FirstService’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Check out our latest analysis for FirstService
What's The Opportunity In FirstService?
According to our valuation model, FirstService seems to be fairly priced at around 5.7% below our intrinsic value, which means if you buy FirstService today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth CA$236.44, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, FirstService’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What kind of growth will FirstService generate?
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 44% over the next couple of years, the future seems bright for FirstService. 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? It seems like the market has already priced in FSV’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on FSV, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. While conducting our analysis, we found that FirstService has 2 warning signs and it would be unwise to ignore these.
If you are no longer interested in FirstService, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
