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Is Stericycle, Inc. (NASDAQ:SRCL) Potentially Undervalued?

Simply Wall St

Stericycle, Inc. (NASDAQ:SRCL), which is in the commercial services business, and is based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine Stericycle’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Stericycle

Is Stericycle still cheap?

Great news for investors – Stericycle is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $75.02, but it is currently trading at US$50.62 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Stericycle’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Stericycle generate?

NasdaqGS:SRCL Past and Future Earnings, September 18th 2019

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. Though in the case of Stericycle, it is expected to deliver a relatively unexciting top-line growth of 8.9% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since SRCL is currently undervalued, 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 undervaluation.

Are you a potential investor? If you’ve been keeping an eye on SRCL for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy SRCL. 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.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Stericycle. You can find everything you need to know about Stericycle in the latest infographic research report. If you are no longer interested in Stericycle, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.