Is There Now An Opportunity In The Interpublic Group of Companies, Inc. (NYSE:IPG)?
Today we're going to take a look at the well-established The Interpublic Group of Companies, Inc. (NYSE:IPG). The company's stock maintained its current share price over the past couple of month on the NYSE, with a relatively tight range of US$30.78 to US$33.40. However, does this price actually reflect the true value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Interpublic Group of Companies’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 Interpublic Group of Companies
What Is Interpublic Group of Companies Worth?
Good news, investors! Interpublic Group of Companies is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 11.36x is currently well-below the industry average of 15.61x, meaning that it is trading at a cheaper price relative to its peers. However, given that Interpublic Group of Companies’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Interpublic Group of Companies?
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. However, with a relatively muted profit growth of 1.1% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Interpublic Group of Companies, at least in the short term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since IPG is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping an eye on IPG for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy IPG. 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.
If you want to dive deeper into Interpublic Group of Companies, you'd also look into what risks it is currently facing. For example - Interpublic Group of Companies has 2 warning signs we think you should be aware of.
If you are no longer interested in Interpublic Group of Companies, 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.
