Northwest Bancshares Inc (NASDAQ:NWBI), operating in the financial services industry based in United States, maintained its current share price over the past couple of month on the NasdaqGS, with a relatively tight range of $15.1 to $16.37. However, does this price actually reflect the true value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at NWBI’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for NWBI
Is NWBI still cheap?
According to my relative valuation model, NWBI seems to be currently fairly priced. In this instance, I’ve used the price-to-equity (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that NWBI’s ratio of 18.8x is trading slightly below its industry peers’ ratio of 24.4x, which means if you buy NWBI today, you’d be paying a fair price for it. And if you believe that NWBI should be trading at this level in the long run, then there’s not much of an upside to gain from mispricing. Furthermore, it seems like NWBI’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because NWBI’s stock is less volatile than the wider market given its low beta.
What kind of growth will NWBI 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.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 NWBI future expectations. NWBI’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in NWBI’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at NWBI? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on NWBI, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for NWBI, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Northwest Bancshares. You can find everything you need to know about NWBI in the latest infographic research report. If you are no longer interested in Northwest Bancshares, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.