Stock Analysis

What Does Boyd Group Services Inc.'s (TSE:BYD) Share Price Indicate?

  •  Updated
TSX:BYD
Source: Shutterstock

While Boyd Group Services Inc. (TSE:BYD) might not be the most widely known stock at the moment, it saw a double-digit share price rise of over 10% in the past couple of months on the TSX. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an 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 the opportunity still exists.

View our latest analysis for Boyd Group Services

What's the opportunity in Boyd Group Services?

According to my valuation model, Boyd Group Services seems to be fairly priced at around 12.05% 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 the company’s true value is CA$222.80, then there isn’t really any room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Boyd Group Services’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of Boyd Group Services look like?

earnings-and-revenue-growth
TSX:BYD Earnings and Revenue Growth October 11th 2021

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 the upcoming year, Boyd Group Services' earnings are expected to increase by 49%, 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 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 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 an eye on BYD, 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.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. While conducting our analysis, we found that Boyd Group Services has 1 warning sign and it would be unwise to ignore it.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Boyd Group Services is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis