Is Now The Time To Look At 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$2.91 at one point, and dropping to the lows of AU$2.57. 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$2.69 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.

Check out our latest analysis for Cleanaway Waste Management

What Is Cleanaway Waste Management Worth?

According to my valuation model, Cleanaway Waste Management seems to be fairly priced at around 9.02% above my intrinsic value, which means if you buy Cleanaway Waste Management today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth A$2.47, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, Cleanaway Waste Management has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Cleanaway Waste Management generate?

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. Cleanaway Waste Management's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in CWY’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 tabs on CWY, now may not be the most optimal 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.

If you'd like to know more about Cleanaway Waste Management as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 2 warning signs for Cleanaway Waste Management you should know about.

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.