While Dycom Industries, Inc. (NYSE:DY) might not have the largest market cap around , it saw significant share price movement during recent months on the NYSE, rising to highs of US$203 and falling to the lows of US$173. 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 Dycom Industries' current trading price of US$179 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 Dycom Industries’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 Dycom Industries

What's The Opportunity In Dycom Industries?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 5.3% below our intrinsic value, which means if you buy Dycom Industries today, you’d be paying a fair price for it. And if you believe the company’s true value is $189.52, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Dycom Industries’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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 does the future of Dycom Industries look like?

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. Dycom Industries' earnings over the next few years are expected to increase by 72%, 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? It seems like the market has already priced in DY’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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on DY, 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.

So while earnings quality is important, it's equally important to consider the risks facing Dycom Industries at this point in time. Every company has risks, and we've spotted 1 warning sign for Dycom Industries you should know about.

If you are no longer interested in Dycom Industries, 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.