Why WSP Global Inc. (TSE:WSP) Could Be Worth Watching

Let's talk about the popular WSP Global Inc. (TSE:WSP). The company's shares saw a decent share price growth of 18% on the TSX over the last few months. The company is now trading at yearly-high levels following the recent surge in its share price. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine WSP Global’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for WSP Global

What Is WSP Global Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 4.5% below our intrinsic value, which means if you buy WSP Global today, you’d be paying a fair price for it. And if you believe the company’s true value is CA$261.63, then there’s not much of an upside to gain from mispricing. In addition to this, WSP Global has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will WSP Global 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. WSP Global's earnings over the next few years are expected to increase by 77%, indicating a highly optimistic future ahead. This should lead to more robust 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 WSP’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 financial strength of the company. 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 WSP, now may not be the most advantageous 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing WSP Global at this point in time. At Simply Wall St, we found 1 warning sign for WSP Global and we think they deserve your attention.

If you are no longer interested in WSP Global, 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.