Is It Too Late To Consider Buying Cleanaway Waste Management Limited (ASX:CWY)?

Cleanaway Waste Management Limited (ASX:CWY), is not the largest company out there, but it received a lot of attention from a substantial price movement on the ASX over the last few months, increasing to AU$2.92 at one point, and dropping to the lows of AU$2.64. 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 Cleanaway Waste Management's current trading price of AU$2.73 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 Cleanaway Waste Management’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 Cleanaway Waste Management

What's The Opportunity In Cleanaway Waste Management?

According to our valuation model, Cleanaway Waste Management seems to be fairly priced at around 13% below our intrinsic value, which means if you buy Cleanaway Waste Management today, you’d be paying a fair price for it. And if you believe the company’s true value is A$3.13, then there’s not much of an upside to gain from mispricing. In addition to this, Cleanaway Waste Management has a low beta, which suggests its share price is less volatile than the wider market.

What does the future of Cleanaway Waste Management look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to grow by 82% over the next couple of years, the future seems bright for Cleanaway Waste Management. 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? CWY’s optimistic 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 tabs on CWY, 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.

Diving deeper into the forecasts for Cleanaway Waste Management mentioned earlier will help you understand how analysts view the stock going forward. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Cleanaway Waste Management, 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.