Why Beacon Roofing Supply, Inc. (NASDAQ:BECN) Could Be Worth Watching

While Beacon Roofing Supply, Inc. (NASDAQ:BECN) might not have the largest market cap around , it saw a decent share price growth of 17% on the NASDAQGS over the last few months. The company is inching closer to its yearly highs following the recent share price climb. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at Beacon Roofing Supply’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Beacon Roofing Supply

Is Beacon Roofing Supply Still Cheap?

Great news for investors – Beacon Roofing Supply is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $150.49, but it is currently trading at US$95.89 on the share market, meaning that there is still an opportunity to buy now. However, given that Beacon Roofing Supply’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.

What kind of growth will Beacon Roofing Supply generate?

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. 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. Though in the case of Beacon Roofing Supply, it is expected to deliver a relatively unexciting top-line growth of 6.6% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since BECN 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 BECN 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 BECN. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

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. While conducting our analysis, we found that Beacon Roofing Supply has 1 warning sign and it would be unwise to ignore this.

If you are no longer interested in Beacon Roofing Supply, 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.