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While Installed Building Products, Inc. (NYSE:IBP) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$206 at one point, and dropping to the lows of US$156. 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 Installed Building Products' current trading price of US$158 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 Installed Building Products’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
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Is Installed Building Products Still Cheap?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 16% below our intrinsic value, which means if you buy Installed Building Products today, you’d be paying a fair price for it. And if you believe the company’s true value is $188.53, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Installed Building Products’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.
View our latest analysis for Installed Building Products
What does the future of Installed Building Products look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. However, with a relatively muted profit growth of 8.1% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Installed Building Products, at least in the short term.
What This Means For You
Are you a shareholder? IBP’s 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?