While The Goodyear Tire & Rubber Company (NASDAQ:GT) might not have the largest market cap around , it saw a significant share price rise of 32% in the past couple of months on the NASDAQGS. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. 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 take a look at Goodyear Tire & Rubber's outlook and value based on the most recent financial data to see if the opportunity still exists.
What's The Opportunity In Goodyear Tire & Rubber?
Great news for investors – Goodyear Tire & Rubber is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $12.89, but it is currently trading at US$10.10 on the share market, meaning that there is still an opportunity to buy now. However, given that Goodyear Tire & Rubber'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.
Can we expect growth from Goodyear Tire & Rubber?
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. However, with a relatively muted revenue growth of 1.1% expected over the next couple of years, growth doesn't seem like a key driver for a buy decision for Goodyear Tire & Rubber, at least in the short term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since GT is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. 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 GT for a while, now might be the time to enter the stock. Its future outlook isn't fully reflected in the current share price yet, which means it's not too late to buy GT. 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.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Goodyear Tire & Rubber.
If you are no longer interested in Goodyear Tire & Rubber, 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.
