What Does Astec Industries, Inc.'s (NASDAQ:ASTE) Share Price Indicate?

Astec Industries, Inc. (NASDAQ:ASTE), is not the largest company out there, but it saw a decent share price growth of 19% on the NASDAQGS over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine Astec Industries’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Astec Industries

Is Astec Industries Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 1.04% above our intrinsic value, which means if you buy Astec Industries today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $35.57, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Astec Industries’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Astec Industries look like?

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. However, with a relatively muted revenue growth of 8.5% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Astec Industries, at least in the short term.

What This Means For You

Are you a shareholder? ASTE’s future growth appears to have been factored into the current share price, 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 confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on ASTE, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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. Case in point: We've spotted 1 warning sign for Astec Industries you should be aware of.

If you are no longer interested in Astec Industries, 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.