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

Boyd Group Services Inc. (TSE:BYD), might not be a large cap stock, but it saw a significant share price rise of over 20% in the past couple of months on the TSX. 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. However, what if the stock is still a bargain? Let’s examine Boyd Group Services’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Boyd Group Services

What's The Opportunity In Boyd Group Services?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 10.02% above my intrinsic value, which means if you buy Boyd Group Services today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth CA$164.52, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Boyd Group Services’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

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. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. In Boyd Group Services' case, its earnings over the next year are expected to double, indicating an incredibly 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 BYD’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 an eye on BYD, 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Boyd Group Services, you'd also look into what risks it is currently facing. For instance, we've identified 3 warning signs for Boyd Group Services (1 is potentially serious) 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.