At AU$16.70, Is It Time To Put Worley Limited (ASX:WOR) On Your Watch List?

Worley Limited (ASX:WOR), might not be a large cap stock, but it maintained its current share price over the past couple of month on the ASX, with a relatively tight range of AU$16.18 to AU$17.66. However, does this price actually reflect the true value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Worley’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Worley

Is Worley Still Cheap?

According to my valuation model, Worley seems to be fairly priced at around 11% below my intrinsic value, which means if you buy Worley today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth A$18.74, then there isn’t much room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Worley’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Worley generate?

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 Worley. 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 WOR’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 tabs on WOR, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about Worley as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 3 warning signs for Worley you should be mindful of and 1 of these is potentially serious.

If you are no longer interested in Worley, 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.