Essential Utilities, Inc. (NYSE:WTRG), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$38.66 at one point, and dropping to the lows of US$33.88. 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 Essential Utilities' current trading price of US$34.51 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 Essential Utilities's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

What's The Opportunity In Essential Utilities?

The stock seems fairly valued at the moment according to our valuation model. It's trading around 10% below our intrinsic value, which means if you buy Essential Utilities today, you'd be paying a fair price for it. And if you believe that the stock is really worth $38.56, then there's not much of an upside to gain from mispricing. In addition to this, Essential Utilities has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from Essential Utilities?

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 the company's future expectations. With profit expected to grow by 34% over the next couple of years, the future seems bright for Essential Utilities. 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 WTRG'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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you've been keeping an eye on WTRG, now may not be the most advantageous 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. Every company has risks, and we've spotted 3 warning signs for Essential Utilities (of which 1 is concerning!) you should know about.

If you are no longer interested in Essential Utilities, 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.