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What Does Beacon Roofing Supply, Inc.'s (NASDAQ:BECN) Share Price Indicate?

Simply Wall St

Beacon Roofing Supply, Inc. (NASDAQ:BECN), which is in the trade distributors business, and is based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. 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 Beacon Roofing Supply’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Beacon Roofing Supply

Is Beacon Roofing Supply still cheap?

Great news for investors – Beacon Roofing Supply is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $60.75, but it is currently trading at US$30.50 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Beacon Roofing Supply’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Beacon Roofing Supply generate?

NasdaqGS:BECN Past and Future Earnings, October 13th 2019

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. Beacon Roofing Supply’s revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since BECN is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive 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 BECN 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 BECN. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Beacon Roofing Supply. You can find everything you need to know about Beacon Roofing Supply in the latest infographic research report. If you are no longer interested in Beacon Roofing Supply, 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.