Is Now An Opportune Moment To Examine Carriage Services, Inc. (NYSE:CSV)?
Carriage Services, Inc. (NYSE:CSV), is not the largest company out there, but it saw significant share price movement during recent months on the NYSE, rising to highs of US$41.03 and falling to the lows of US$23.40. 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 Carriage Services' current trading price of US$23.88 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Carriage Services’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Carriage Services
What's The Opportunity In Carriage Services?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 16% below my intrinsic value, which means if you buy Carriage Services today, you’d be paying a fair price for it. And if you believe the company’s true value is $28.52, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Carriage Services’s share price may be more stable over time (relative to the market), as indicated by its low beta.
Can we expect growth from Carriage Services?
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 negative profit growth of -4.5% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Carriage Services. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Currently, CSV appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on CSV for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on CSV should the price fluctuate below its true value.
So while earnings quality is important, it's equally important to consider the risks facing Carriage Services at this point in time. Case in point: We've spotted 2 warning signs for Carriage Services you should be aware of.
If you are no longer interested in Carriage Services, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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