Is There Now An Opportunity In Boyd Group Services Inc. (TSE:BYD)?

While Boyd Group Services Inc. (TSE:BYD) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the TSX, rising to highs of CA$260 and falling to the lows of CA$176. 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 Boyd Group Services' current trading price of CA$185 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 Boyd Group Services’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 Boyd Group Services

What is Boyd Group Services worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 5.6% below my intrinsic value, which means if you buy Boyd Group Services today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth CA$195.92, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Boyd Group Services’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.

Can we expect growth from Boyd Group Services?

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. Boyd Group Services' 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? BYD’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 confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on BYD, now may not be the most advantageous 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 diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For instance, we've identified 2 warning signs for Boyd Group Services (1 is concerning) you should be familiar with.

If you are no longer interested in Boyd Group Services, 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.