Is It Time To Consider Buying Freightways Group Limited (NZSE:FRW)?

While Freightways Group Limited (NZSE:FRW) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the NZSE, rising to highs of NZ$9.69 and falling to the lows of NZ$8.41. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Freightways Group's current trading price of NZ$8.41 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Freightways Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Freightways Group

Is Freightways Group Still Cheap?

According to my valuation model, Freightways Group seems to be fairly priced at around 6.7% below my intrinsic value, which means if you buy Freightways Group today, you’d be paying a fair price for it. And if you believe that the stock is really worth NZ$9.02, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Freightways Group’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of Freightways Group 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. Freightways Group's earnings over the next few years 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 FRW’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 FRW, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. While conducting our analysis, we found that Freightways Group has 3 warning signs and it would be unwise to ignore them.

If you are no longer interested in Freightways Group, 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.