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SunPower Corporation (NASDAQ:SPWR), is not the largest company out there, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$49.96 and falling to the lows of US$20.91. 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 SunPower's current trading price of US$20.91 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 SunPower’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is SunPower worth?
Great news for investors – SunPower is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $29.19, but it is currently trading at US$20.91 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 SunPower’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 SunPower?
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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for SunPower, at least in the near future.
What this means for you:
Are you a shareholder? Although SPWR is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to SPWR, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on SPWR for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Every company has risks, and we've spotted 4 warning signs for SunPower (of which 2 are a bit concerning!) you should know about.
If you are no longer interested in SunPower, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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. 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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