Axalta Coating Systems Ltd. (NYSE:AXTA), which is in the chemicals 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 $28.01 at one point, and dropping to the lows of $24.8. 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 Axalta Coating Systems's current trading price of $25.52 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 Axalta Coating Systems’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
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What is Axalta Coating Systems worth?
Great news for investors – Axalta Coating Systems is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $42.14, but it is currently trading at US$25.52 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 Axalta Coating Systems’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 Axalta Coating Systems?
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. Axalta Coating Systems’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since AXTA 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 AXTA for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy AXTA. 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Axalta Coating Systems. You can find everything you need to know about Axalta Coating Systems in the latest infographic research report. If you are no longer interested in Axalta Coating Systems, 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 email@example.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.