A. O. Smith Corporation (NYSE:AOS), is not the largest company out there, but it saw a decent share price growth of 16% on the NYSE over the last few months. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine A. O. Smith’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.
Great news for investors – A. O. Smith is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $91.99, but it is currently trading at US$69.08 on the share market, meaning that there is still an opportunity to buy now. However, given that A. O. Smith’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.
See our latest analysis for A. O. Smith
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. A. O. Smith's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
Are you a shareholder? Since AOS 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 AOS for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy AOS. 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 buy.
Diving deeper into the forecasts for A. O. Smith mentioned earlier will help you understand how analysts view the stock going forward. Luckily, you can check out what analysts are forecasting by clicking here.
If you are no longer interested in A. O. Smith, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
We've created the ultimate portfolio companion for stock investors, and it's free.
• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocks
Try a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.
免责声明:投资有风险,本文并非投资建议,以上内容不应被视为任何金融产品的购买或出售要约、建议或邀请,作者或其他用户的任何相关讨论、评论或帖子也不应被视为此类内容。本文仅供一般参考,不考虑您的个人投资目标、财务状况或需求。TTM对信息的准确性和完整性不承担任何责任或保证,投资者应自行研究并在投资前寻求专业建议。