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Is It Time To Consider Buying Martin Marietta Materials, Inc. (NYSE:MLM)?

Martin Marietta Materials, Inc. (NYSE:MLM) led the NYSE gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Martin Marietta Materials’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Martin Marietta Materials

What Is Martin Marietta Materials Worth?

Martin Marietta Materials appears to be overvalued by 25% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$397 on the market compared to my intrinsic value of $318.81. This means that the buying opportunity has probably disappeared for now. In addition to this, it seems like Martin Marietta Materials’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

Can we expect growth from Martin Marietta Materials?

earnings-and-revenue-growth
earnings-and-revenue-growth

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. Martin Marietta Materials' earnings over the next few years are expected to increase by 36%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in MLM’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe MLM should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on MLM for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for MLM, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Martin Marietta Materials as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 1 warning sign for Martin Marietta Materials and you'll want to know about this.

If you are no longer interested in Martin Marietta Materials, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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