Hilltop Holdings Inc. (NYSE:HTH), operating in the financial services industry based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. 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 Hilltop Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
What is Hilltop Holdings worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 17.27% above my intrinsic value, which means if you buy Hilltop Holdings today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $18.94, there’s only an insignificant downside when the price falls to its real value. Furthermore, Hilltop Holdings’s low beta implies that the stock is less volatile than the wider market.
Can we expect growth from Hilltop Holdings?
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. However, with a relatively muted profit growth of 9.3% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Hilltop Holdings, at least in the short term.
What this means for you:
Are you a shareholder? HTH’s future growth appears to have been factored into the current share price, 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 HTH, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Hilltop Holdings. You can find everything you need to know about Hilltop Holdings in the latest infographic research report. If you are no longer interested in Hilltop Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.