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Today we’re going to take a look at the well-established Corning Incorporated (NYSE:GLW). The company’s stock saw significant share price volatility over the past couple of months on the NYSE, rising to the highs of $34.85 and falling to the lows of $27.35. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Corning’s current trading price of $27.88 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Corning’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for Corning
What is Corning worth?
Corning appears to be overvalued by 84% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$27.88 on the market compared to my intrinsic value of $15.13. This means that the opportunity to buy Corning at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Corning’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Corning look like?
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 revenues expected to grow by a double-digit 21.13% over the next couple of years, the outlook is positive for Corning. If the level of expenses is able to be maintained, 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? GLW’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe GLW should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.