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Should You Investigate Sykes Enterprises, Incorporated (NASDAQ:SYKE) At US$34.12?

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Simply Wall St
·3 min read
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Sykes Enterprises, Incorporated (NASDAQ:SYKE), which is in the it business, and is 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. However, what if the stock is still a bargain? Today I will analyse the most recent data on Sykes Enterprises’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Sykes Enterprises

What's the opportunity in Sykes Enterprises?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 6.8% below my intrinsic value, which means if you buy Sykes Enterprises today, you’d be paying a fair price for it. And if you believe that the stock is really worth $36.59, then there’s not much of an upside to gain from mispricing. In addition to this, Sykes Enterprises has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from Sykes Enterprises?

NasdaqGS:SYKE Past and Future Earnings, February 6th 2020
NasdaqGS:SYKE Past and Future Earnings, February 6th 2020

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to grow by 54% over the next couple of years, the future seems bright for Sykes Enterprises. 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 SYKE’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 financial strength of the company. 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 SYKE, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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.

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