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Clearway Energy, Inc. (NYSE:CWEN.A), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. The company is now trading at yearly-high levels following the recent surge in its share price. 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. However, could the stock still be trading at a relatively cheap price? Let’s examine Clearway Energy’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for Clearway Energy
What Is Clearway Energy Worth?
Great news for investors – Clearway Energy is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $44.64, but it is currently trading at US$27.55 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Clearway Energy’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from Clearway Energy?
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. 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 profit expected to grow by 84% over the next couple of years, the future seems bright for Clearway Energy. 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? Since CWEN.A is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on CWEN.A for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CWEN.A. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.