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Should You Investigate Nielsen Holdings plc (NYSE:NLSN) At US$20.62?

Simply Wall St

Nielsen Holdings plc (NYSE:NLSN), which is in the professional services business, and is based in United States, received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$23.80 at one point, and dropping to the lows of US$20.02. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Nielsen Holdings's current trading price of US$20.62 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Nielsen Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Nielsen Holdings

What's the opportunity in Nielsen Holdings?

Great news for investors – Nielsen Holdings is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $27.69, but it is currently trading at US$20.62 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Nielsen Holdings’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 kind of growth will Nielsen Holdings generate?

NYSE:NLSN Past and Future Earnings, October 16th 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. 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. Though in the case of Nielsen Holdings, it is expected to deliver a relatively unexciting top-line growth of 3.9% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since NLSN is currently undervalued, it may be a great time to increase your holdings in the stock. 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 NLSN for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy NLSN. 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 Nielsen Holdings. You can find everything you need to know about Nielsen Holdings in the latest infographic research report. If you are no longer interested in Nielsen 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.