XPEL, Inc. (NASDAQ:XPEL), might not be a large cap stock, but it led the NASDAQCM gainers with a relatively large price hike in the past couple of weeks. While good news for shareholders, the company has traded much higher in the past year. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let's examine XPEL's valuation and outlook in more detail to determine if there's still a bargain opportunity.
Is XPEL Still Cheap?
Good news, investors! XPEL is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is $64.09, but it is currently trading at US$44.45 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because XPEL'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 kind of growth will XPEL 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. With profit expected to grow by 32% over the next couple of years, the future seems bright for XPEL. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? Since XPEL is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive 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 capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you've been keeping an eye on XPEL for a while, now might be the time to make a leap. Its buoyant future outlook isn't fully reflected in the current share price yet, which means it's not too late to buy XPEL. 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.
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. Case in point: We've spotted 1 warning sign for XPEL you should be aware of.
If you are no longer interested in XPEL, 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.
