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At US$77.35, Is It Time To Put Autoliv, Inc. (NYSE:ALV) On Your Watch List?

Simply Wall St

Autoliv, Inc. (NYSE:ALV), which is in the auto components business, and is based in Sweden, saw significant share price movement during recent months on the NYSE, rising to highs of US$86.79 and falling to the lows of US$77.35. 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 Autoliv's current trading price of US$77.35 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 Autoliv’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 Autoliv

What is Autoliv worth?

Good news, investors! Autoliv is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $118.59, but it is currently trading at US$77.35 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 Autoliv’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.

What kind of growth will Autoliv generate?

NYSE:ALV Past and Future Earnings, January 25th 2020

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. With profit expected to more than double over the next couple of years, the future seems bright for Autoliv. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? Since ALV is currently undervalued, it may be a great time to increase 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 capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on ALV for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ALV. 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 buy.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Autoliv. You can find everything you need to know about Autoliv in the latest infographic research report. If you are no longer interested in Autoliv, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.