Stifel Financial Corp. (NYSE:SF), which is in the capital markets business, and is based in United States, received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $61.49 at one point, and dropping to the lows of $51.22. 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 Stifel Financial's current trading price of $51.26 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 Stifel Financial’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is Stifel Financial worth?
Great news for investors – Stifel Financial is still trading at a fairly cheap price. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Stifel Financial’s ratio of 8.97x is below its peer average of 40.41x, which suggests the stock is undervalued compared to the Capital Markets industry. What’s more interesting is that, Stifel Financial’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 Stifel Financial generate?
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. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 9.6% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Stifel Financial, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since SF 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 capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on SF 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 SF. 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 Stifel Financial. You can find everything you need to know about Stifel Financial in the latest infographic research report. If you are no longer interested in Stifel Financial, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.