Why Alimentation Couche-Tard Inc. (TSE:ATD) Could Be Worth Watching

Alimentation Couche-Tard Inc. (TSE:ATD) saw a double-digit share price rise of over 10% in the past couple of months on the TSX. The company is inching closer to its yearly highs following the recent share price climb. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today we will analyse the most recent data on Alimentation Couche-Tard’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Alimentation Couche-Tard

What's The Opportunity In Alimentation Couche-Tard?

Great news for investors – Alimentation Couche-Tard is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is CA$119.74, but it is currently trading at CA$81.52 on the share market, meaning that there is still an opportunity to buy now. Alimentation Couche-Tard’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What does the future of Alimentation Couche-Tard look like?

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 over the next few years are expected to increase by 26%, 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? Since ATD is currently undervalued, it may be a great time to increase 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 capital structure 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 make a leap. 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 track record of its management team, 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. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Alimentation Couche-Tard.

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.