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Is It Time To Consider Buying Alimentation Couche-Tard Inc. (TSE:ATD)?
Let's talk about the popular Alimentation Couche-Tard Inc. (TSE:ATD). The company's shares saw a decent share price growth in the teens level on the TSX over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today I will analyse the most recent data on Alimentation Couche-Tard’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for Alimentation Couche-Tard
What Is Alimentation Couche-Tard Worth?
Great news for investors – Alimentation Couche-Tard is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is CA$84.76, but it is currently trading at CA$67.54 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Alimentation Couche-Tard’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will Alimentation Couche-Tard generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. Alimentation Couche-Tard's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since ATD is currently undervalued, it may be a great time to accumulate more of 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 financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on ATD for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ATD. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.
So while earnings quality is important, it's equally important to consider the risks facing Alimentation Couche-Tard at this point in time. You'd be interested to know, that we found 1 warning sign for Alimentation Couche-Tard and you'll want to know about it.
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Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
About TSX:ATD
Alimentation Couche-Tard
Operates and licenses convenience stores in North America, Europe, and Asia.
Undervalued with mediocre balance sheet.