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While Watts Water Technologies, Inc. (NYSE:WTS) might not have the largest market cap around , it saw a decent share price growth of 15% on the NYSE over the last few months. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. 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? Today we will analyse the most recent data on Watts Water Technologies’s outlook and valuation to see if the opportunity still exists.
What's The Opportunity In Watts Water Technologies?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 19% below our intrinsic value, which means if you buy Watts Water Technologies today, you’d be paying a fair price for it. And if you believe that the stock is really worth $254.85, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, Watts Water Technologies has a low beta, which suggests its share price is less volatile than the wider market.
View our latest analysis for Watts Water Technologies
What kind of growth will Watts Water Technologies 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. Watts Water Technologies' 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.
What This Means For You
Are you a shareholder? WTS’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. 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 WTS, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.