What Does The Goodyear Tire & Rubber Company's (NASDAQ:GT) Share Price Indicate?

The Goodyear Tire & Rubber Company (NASDAQ:GT), might not be a large cap stock, but it saw a significant share price rise of 27% in the past couple of months on the NASDAQGS. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the mid-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? Let’s examine Goodyear Tire & Rubber’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Goodyear Tire & Rubber

Is Goodyear Tire & Rubber Still Cheap?

Great news for investors – Goodyear Tire & Rubber is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $12.89, but it is currently trading at US$9.71 on the share market, meaning that there is still an opportunity to buy now. However, given that Goodyear Tire & Rubber’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Goodyear Tire & Rubber?

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. However, with a relatively muted revenue growth of 1.1% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Goodyear Tire & Rubber, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since GT is currently undervalued, it may be a great time to increase your holdings in the stock. 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 GT 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 GT. 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 buy.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. In terms of investment risks, we've identified 1 warning sign with Goodyear Tire & Rubber, and understanding it should be part of your investment process.

If you are no longer interested in Goodyear Tire & Rubber, 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.