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Today we're going to take a look at the well-established WSP Global Inc. (TSE:WSP). The company's stock saw a decent share price growth of 10% on the TSX over the last few months. The recent share price gains has brought the company back closer to its yearly peak. With many analysts covering the large-cap 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? Today we will analyse the most recent data on WSP Global’s outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for WSP Global
Is WSP Global Still Cheap?
WSP Global appears to be overvalued by 39% at the moment, based on our discounted cash flow valuation. The stock is currently priced at CA$246 on the market compared to our intrinsic value of CA$176.14. Not the best news for investors looking to buy! Furthermore, WSP Global’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
Can we expect growth from WSP Global?
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. With profit expected to grow by 68% over the next couple of years, the future seems bright for WSP Global. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? WSP’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe WSP 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.
Are you a potential investor? If you’ve been keeping an eye on WSP for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for WSP, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.