Is There Now An Opportunity In Dexterra Group Inc. (TSE:DXT)?
While Dexterra Group Inc. (TSE:DXT) might not be the most widely known stock at the moment, it saw its share price hover around a small range of CA$5.44 to CA$5.90 over the last few weeks. But is this actually reflective of the share value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Dexterra Group’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 Dexterra Group
What's The Opportunity In Dexterra Group?
According to my valuation model, Dexterra Group seems to be fairly priced at around 2.63% above my intrinsic value, which means if you buy Dexterra Group today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is CA$5.38, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Dexterra Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Dexterra Group?
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. With profit expected to more than double over the next couple of years, the future seems bright for Dexterra Group. 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? DXT’s optimistic 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 DXT, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which 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.
If you want to dive deeper into Dexterra Group, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 2 warning signs for Dexterra Group you should know about.
If you are no longer interested in Dexterra Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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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.
