Is There Now An Opportunity In Core & Main, Inc. (NYSE:CNM)?

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While Core & Main, Inc. (NYSE:CNM) might not have the largest market cap around , it received a lot of attention from a substantial price increase on the NYSE over the last few months. The company is now trading at yearly-high levels following the recent surge in its share price. 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. However, could the stock still be trading at a relatively cheap price? Today we will analyse the most recent data on Core & Main’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Core & Main

Is Core & Main Still Cheap?

Core & Main appears to be overvalued by 28% at the moment, based on our discounted cash flow valuation. The stock is currently priced at US$40.41 on the market compared to our intrinsic value of $31.60. This means that the opportunity to buy Core & Main at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Core & Main’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.

Can we expect growth from Core & Main?

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earnings-and-revenue-growth

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. Core & Main's earnings over the next few years are expected to increase by 82%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in CNM’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe CNM should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on CNM for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for CNM, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Core & Main, you'd also look into what risks it is currently facing. Case in point: We've spotted 1 warning sign for Core & Main you should be aware of.

If you are no longer interested in Core & Main, 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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