Yahoo Finance Is Woodward Inc (NASDAQ:WWD) Undervalued?
Woodward Inc (NASDAQ:WWD), a machinery company based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the NasdaqGS. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine Woodward’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. Check out our latest analysis for Woodward
What is Woodward worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 8.15% above my intrinsic value, which means if you buy Woodward today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $71.99, 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 Woodward’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 Woodward look like?
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. With profit expected to grow by 71.40% over the next couple of years, the future seems bright for Woodward. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has already priced in WWD’s positive outlook, 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 confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on WWD, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Woodward. You can find everything you need to know about Woodward in the latest infographic research report. If you are no longer interested in Woodward, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
