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What Does Element Fleet Management Corp.'s (TSE:EFN) Share Price Indicate?

Simply Wall St

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Element Fleet Management Corp. (TSE:EFN), which is in the diversified financial business, and is based in Canada, saw a significant share price rise of over 20% in the past couple of months on the TSX. 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? Today I will analyse the most recent data on Element Fleet Management’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Element Fleet Management

What is Element Fleet Management worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 14% below my intrinsic value, which means if you buy Element Fleet Management today, you’d be paying a reasonable price for it. And if you believe the company’s true value is CA$11.26, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Element Fleet Management’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of Element Fleet Management look like?

TSX:EFN Past and Future Earnings, May 31st 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. However, with a relatively muted revenue growth of 8.6% expected in the upcoming year, short term growth doesn’t seem like a key driver for a buy decision for Element Fleet Management.

What this means for you:

Are you a shareholder? EFN’s future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on EFN, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

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