Today we’re going to take a look at the well-established EMCOR Group, Inc. (NYSE:EME). The company’s stock saw a decent share price growth of 16% on the NYSE over the last few months. The recent jump in the share price has meant that the company is trading around its 52-week high. As a large-cap stock, it seems odd EMCOR Group is not more well-covered by analysts. Although, there is more of an opportunity for mispricing in stocks with low coverage, 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 EMCOR Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for EMCOR Group
What Is EMCOR Group Worth?
Great news for investors – EMCOR Group is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $503.23, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because EMCOR Group’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 EMCOR Group generate?
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. With profit expected to grow by a double-digit 16% in the upcoming year, the short-term outlook is positive for EMCOR Group. 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 EME 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 EME 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 EME. 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.
If you’d like to know more about EMCOR Group as a business, it’s important to be aware of any risks it’s facing. Case in point: We’ve spotted 1 warning sign for EMCOR Group you should be aware of.
If you are no longer interested in EMCOR Group, 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.
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