Yahoo Finance Why Robert Half International Inc. (NYSE:RHI) Could Be Worth Watching
Robert Half International Inc. (NYSE:RHI) received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$125 at one point, and dropping to the lows of US$95.18. 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 Robert Half International's current trading price of US$96.37 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Robert Half International’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 Robert Half International
Is Robert Half International still cheap?
According to my valuation model, Robert Half International seems to be fairly priced at around 1.34% above my intrinsic value, which means if you buy Robert Half International today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $95.10, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Robert Half International’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 does the future of Robert Half International look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 negative profit growth of -4.0% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Robert Half International. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? RHI seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on RHI for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on RHI should the price fluctuate below its true value.
With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. When we did our research, we found 2 warning signs for Robert Half International (1 can't be ignored!) that we believe deserve your full attention.
If you are no longer interested in Robert Half International, 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.
