Beacon Roofing Supply, Inc. (NASDAQ:BECN), 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$86.93 and falling to the lows of US$68.71. 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 Beacon Roofing Supply’s current trading price of US$69.48 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 Beacon Roofing Supply’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 Beacon Roofing Supply
Is Beacon Roofing Supply Still Cheap?
Good news, investors! Beacon Roofing Supply is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $88.94, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Beacon Roofing Supply’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Beacon Roofing Supply?
NasdaqGS:BECN Earnings and Revenue Growth October 29th 2023
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. Beacon Roofing Supply’s earnings over the next few years are expected to increase by 47%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since BECN is currently undervalued, it may be a great time to accumulate more of 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 financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on BECN for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy BECN. 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 investment decision.
If you want to dive deeper into Beacon Roofing Supply, you’d also look into what risks it is currently facing. While conducting our analysis, we found that Beacon Roofing Supply has 1 warning sign and it would be unwise to ignore this.
If you are no longer interested in Beacon Roofing Supply, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
What are the risks and opportunities for Beacon Roofing Supply?
Beacon Roofing Supply, Inc., together with its subsidiaries, engages in distribution of residential and non-residential roofing materials, and complementary building products to contractors, home builders, building owners, lumberyards, and retailers in the United States and Canada.Show more
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Rewards
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Trading at 21.9% below our estimate of its fair value
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Earnings are forecast to grow 10.96% per year
Risks
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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.
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