Is There Now An Opportunity In Washington Federal Inc (NASDAQ:WAFD)?
Washington Federal Inc (NASDAQ:WAFD), operating in the financial services industry based in United States, saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $34.35 and falling to the lows of $26.73. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Washington Federal’s current trading price of $27.43 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Washington Federal’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Washington Federal
What’s the opportunity in Washington Federal?
According to my valuation model, Washington Federal seems to be fairly priced at around 10% below my intrinsic value, which means if you buy Washington Federal today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $30.59, then there isn’t much room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Washington Federal’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Washington Federal?
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 1.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Washington Federal, at least in the short term.
What this means for you:
Are you a shareholder? It seems like the market has already priced in WAFD’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. 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 tabs on WAFD, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Washington Federal. You can find everything you need to know about Washington Federal in the latest infographic research report. If you are no longer interested in Washington Federal, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
