Is It Time To Consider Buying Reliance Worldwide Corporation Limited (ASX:RWC)?

Reliance Worldwide Corporation Limited (ASX:RWC), which is in the building business, and is based in United States, received a lot of attention from a substantial price movement on the ASX over the last few months, increasing to AU$4.76 at one point, and dropping to the lows of AU$2.00. 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 Reliance Worldwide's current trading price of AU$2.00 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Reliance Worldwide’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Reliance Worldwide

What is Reliance Worldwide worth?

Good news, investors! Reliance Worldwide is still a bargain right now. According to my valuation, the intrinsic value for the stock is A$3.58, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Reliance Worldwide’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 Reliance Worldwide?

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. Reliance Worldwide’s earnings over the next few years are expected to increase by 40%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since RWC is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive 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 capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on RWC for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy RWC. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Reliance Worldwide. You can find everything you need to know about Reliance Worldwide in the latest infographic research report. If you are no longer interested in Reliance Worldwide, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.