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Badger Infrastructure Solutions Ltd. (TSE:BDGI), is not the largest company out there, but it saw significant share price movement during recent months on the TSX, rising to highs of CA$42.02 and falling to the lows of CA$34.82. 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 Badger Infrastructure Solutions' current trading price of CA$37.87 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Badger Infrastructure Solutions’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What Is Badger Infrastructure Solutions Worth?
Great news for investors – Badger Infrastructure Solutions is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Badger Infrastructure Solutions’s ratio of 19.07x is below its peer average of 38.03x, which indicates the stock is trading at a lower price compared to the Construction industry. Badger Infrastructure Solutions’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its industry peers, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
Check out our latest analysis for Badger Infrastructure Solutions
What kind of growth will Badger Infrastructure Solutions generate?
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. 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. Badger Infrastructure Solutions' earnings over the next few years are expected to increase by 78%, 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? Since BDGI is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. With an optimistic profit 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 price multiple.