When Should You Buy Alimentation Couche-Tard Inc. (TSE:ATD)?

Let's talk about the popular Alimentation Couche-Tard Inc. (TSE:ATD). The company's shares saw its share price hover around a small range of CA$63.48 to CA$68.00 over the last few weeks. But is this actually reflective of the share value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Alimentation Couche-Tard’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View 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. My valuation model shows that the intrinsic value for the stock is CA$86.46, but it is currently trading at CA$65.81 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Alimentation Couche-Tard’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What kind of growth will Alimentation Couche-Tard 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. Though in the case of Alimentation Couche-Tard, it is expected to deliver a relatively unexciting earnings growth of 9.4%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since ATD is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. 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 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.

If you'd like to know more about Alimentation Couche-Tard as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 2 warning signs for Alimentation Couche-Tard you should be aware of.

If you are no longer interested in Alimentation Couche-Tard, 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.