QEP Resources Inc (NYSE:QEP), an energy company based in United States, saw a decent share price growth in the teens level on the NYSE over the last few months. 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. But what if there is still an opportunity to buy? Let’s examine QEP’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. Check out our latest analysis for QEP Resources

Is QEP still cheap?

According to my relative valuation model, QEP seems to be currently fairly priced. I’ve used the price-to-book ratio in this instance because there’s not enough visibility to forecast its cash flows, and its earnings doesn’t seem to reflect its true value. The stock’s ratio of 0.6x is currently trading slightly below its industry peers’ ratio of 1.7x, which means if you buy QEP today, you’d be paying a relatively fair price for it. And if you believe that QEP should be trading at this level in the long run, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since QEP’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 QEP moves relative to the rest of the market.

Can we expect growth from QEP?

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 QEP future expectations. With profit expected to grow by 84.19% over the next couple of years, the future seems bright for QEP. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? It seems like the market has already priced in QEP’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 financial strength of the company. Have these factors changed since the last time you looked at QEP? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on QEP, 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 QEP, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on QEP Resources. You can find everything you need to know about QEP in the latest infographic research report. If you are no longer interested in QEP Resources, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.