Casella Waste Systems, Inc. (NASDAQ:CWST), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$108 and falling to the lows of US$96.59. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Casella Waste Systems' current trading price of US$100 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at Casella Waste Systems's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is Casella Waste Systems Still Cheap?
According to our valuation model, Casella Waste Systems seems to be fairly priced at around 15.82% above our intrinsic value, which means if you buy Casella Waste Systems today, you'd be paying a relatively fair price for it. And if you believe that the stock is really worth $86.45, there's only an insignificant downside when the price falls to its real value. Furthermore, Casella Waste Systems's low beta implies that the stock is less volatile than the wider market.
Can we expect growth from Casella Waste Systems?
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 more than double over the next couple of years, the future seems bright for Casella Waste Systems. 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? It seems like the market has already priced in CWST'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 track record of its management team. Have these factors changed since the last time you looked at the stock? 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 CWST, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, 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.
Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. Be aware that Casella Waste Systems is showing 4 warning signs in our investment analysis and 1 of those is potentially serious...
If you are no longer interested in Casella Waste Systems, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
