While Simpson Manufacturing Co., Inc. (NYSE:SSD) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the NYSE, rising to highs of US$163 and falling to the lows of US$134. 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 Simpson Manufacturing's current trading price of US$134 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 Simpson Manufacturing's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Simpson Manufacturing
What Is Simpson Manufacturing Worth?
The stock is currently trading at US$134 on the share market, which means it is overvalued by 30% compared to my intrinsic value of $103.05. This means that the buying opportunity has probably disappeared for now. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Simpson Manufacturing's share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will Simpson Manufacturing generate?
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. Though in the case of Simpson Manufacturing, it is expected to deliver a relatively unexciting earnings growth of 4.7%, which doesn't help build up its investment thesis. Growth doesn't appear to be a main reason for a buy decision for Simpson Manufacturing, at least in the near term.
What This Means For You
Are you a shareholder? It seems like the market has well and truly priced in SSD's future outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe SSD should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you've been keeping tabs on SSD for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there's no upside from mispricing. However, the positive outlook means it's worth diving deeper into other factors in order to take advantage of the next price drop.
Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. At Simply Wall St, we found 1 warning sign for Simpson Manufacturing and we think they deserve your attention.
If you are no longer interested in Simpson Manufacturing, 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.
