Unisys Corporation (NYSE:UIS), a it services company based in United States, saw a significant share price rise of over 20% in the past couple of months on the NYSE. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at UIS’s outlook and value based on the most recent financial data to see if the opportunity still exists. Check out our latest analysis for Unisys
Is UIS still cheap?
According to my valuation model, UIS seems to be fairly priced at around 8% below my intrinsic value, which means if you buy UIS today, you’d be paying a reasonable price for it. And if you believe that UIS is really worth $9.34, 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 UIS’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, UIS’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What kind of growth will UIS 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. 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 UIS future expectations. In the upcoming year, UIS’s earnings are expected to increase by 47.70%, 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? UIS’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 track record of its management team. Have these factors changed since the last time you looked at UIS? 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 tabs on UIS, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for UIS, 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.