Yahoo Finance Is AMERCO (NASDAQ:UHAL) Potentially Undervalued?
AMERCO (NASDAQ:UHAL), 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$627 and falling to the lows of US$452. 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 AMERCO's current trading price of US$465 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 AMERCO’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for AMERCO
Is AMERCO still cheap?
The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that AMERCO’s ratio of 8.12x is trading slightly below its industry peers’ ratio of 9.17x, which means if you buy AMERCO today, you’d be paying a decent price for it. And if you believe that AMERCO should be trading at this level in the long run, then there’s not much of an upside to gain over and above other industry peers. Furthermore, AMERCO’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.
Can we expect growth from AMERCO?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 a relatively muted profit growth of 1.7% expected over the next year, growth doesn’t seem like a key driver for a buy decision for AMERCO, at least in the short term.
What this means for you:
Are you a shareholder? UHAL’s future growth appears to have been factored into the current share price, with shares trading around industry price multiples. 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 UHAL? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?
Are you a potential investor? If you’ve been keeping tabs on UHAL, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive growth outlook may mean it’s worth diving deeper into other factors in order to take advantage of the next price drop.
In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example, we've discovered 2 warning signs that you should run your eye over to get a better picture of AMERCO.
If you are no longer interested in AMERCO, 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.
