What Is Exchange Income Corporation's (TSE:EIF) Share Price Doing?

While Exchange Income Corporation (TSE:EIF) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the TSX. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the 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? Today we will analyse the most recent data on Exchange Income’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Exchange Income

Is Exchange Income Still Cheap?

Great news for investors – Exchange Income is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is CA$61.97, but it is currently trading at CA$46.79 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Exchange Income’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.

Can we expect growth from Exchange Income?

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. With profit expected to grow by 47% over the next couple of years, the future seems bright for Exchange Income. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? Since EIF 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 capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on EIF 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 EIF. 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.

If you'd like to know more about Exchange Income as a business, it's important to be aware of any risks it's facing. For example, Exchange Income has 3 warning signs (and 2 which shouldn't be ignored) we think you should know about.

If you are no longer interested in Exchange Income, 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.