Why Northwest Pipe Company (NASDAQ:NWPX) Could Be Worth Watching
Northwest Pipe Company (NASDAQ:NWPX), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$33.48 and falling to the lows of US$28.76. 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 Northwest Pipe's current trading price of US$30.78 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Northwest Pipe’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 Northwest Pipe
What Is Northwest Pipe Worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 13% below my intrinsic value, which means if you buy Northwest Pipe today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $35.34, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Northwest Pipe’s low beta implies that the stock is less volatile than the wider market.
What kind of growth will Northwest Pipe 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. 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. However, with a relatively muted profit growth of 7.2% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Northwest Pipe, at least in the short term.
What This Means For You
Are you a shareholder? NWPX’s future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on NWPX, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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.
It can be quite valuable to consider what analysts expect for Northwest Pipe from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.
If you are no longer interested in Northwest Pipe, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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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.
