Is There Now An Opportunity In Telephone and Data Systems, Inc. (NYSE:TDS)?
Telephone and Data Systems, Inc. (NYSE:TDS), is not the largest company out there, but it received a lot of attention from a substantial price increase on the NYSE over the last few months. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Telephone and Data Systems’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for Telephone and Data Systems
Is Telephone and Data Systems Still Cheap?
Great news for investors – Telephone and Data Systems is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $12.51, but it is currently trading at US$8.09 on the share market, meaning that there is still an opportunity to buy now. However, given that Telephone and Data Systems’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.
What does the future of Telephone and Data Systems look like?
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 75% over the next couple of years, the future seems bright for Telephone and Data Systems. 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? Since TDS is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on TDS for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy TDS. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
If you'd like to know more about Telephone and Data Systems as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 2 warning signs for Telephone and Data Systems (of which 1 makes us a bit uncomfortable!) you should know about.
If you are no longer interested in Telephone and Data Systems, 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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