When Should You Buy SNC-Lavalin Group Inc. (TSE:SNC)?

While SNC-Lavalin Group Inc. (TSE:SNC) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price increase on the TSX over the last few months. 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. But what if there is still an opportunity to buy? Let’s examine SNC-Lavalin Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for SNC-Lavalin Group

Is SNC-Lavalin Group Still Cheap?

Great news for investors – SNC-Lavalin Group is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is CA$41.76, but it is currently trading at CA$33.22 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, SNC-Lavalin Group’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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 does the future of SNC-Lavalin Group 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 more than double over the next couple of years, the future seems bright for SNC-Lavalin Group. 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? Since SNC is currently undervalued, it may be a great time to increase 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 SNC 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 SNC. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example, we've found that SNC-Lavalin Group has 4 warning signs (1 is a bit concerning!) that deserve your attention before going any further with your analysis.

If you are no longer interested in SNC-Lavalin Group, 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.