Is Now The Time To Look At Buying Installed Building Products, Inc. (NYSE:IBP)?
Installed Building Products, Inc. (NYSE:IBP), is not the largest company out there, but it saw significant share price movement during recent months on the NYSE, rising to highs of US$140 and falling to the lows of US$111. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Installed Building Products' current trading price of US$120 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 Installed Building Products’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 Installed Building Products
What's the opportunity in Installed Building Products?
Great news for investors – Installed Building Products is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $155.57, but it is currently trading at US$120 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Installed Building Products’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 Installed Building Products?
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 grow by 50% over the next year, the near-term future seems bright for Installed Building Products. 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 IBP is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic 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 IBP 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 IBP. 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.
With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example - Installed Building Products has 2 warning signs we think you should be aware of.
If you are no longer interested in Installed Building Products, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
This article by Simply Wall St is general in nature. 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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