Is Now The Time To Look At Buying CSW Industrials, Inc. (NASDAQ:CSWI)?

CSW Industrials, Inc. (NASDAQ:CSWI), might not be a large cap stock, but it saw a significant share price rise of over 20% in the past couple of months on the NASDAQGS. As a US$2.9b market-cap stock, it seems odd CSW Industrials is not more well-covered by analysts. Although, there is more of an opportunity for mispricing in stocks with low coverage, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on CSW Industrials’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for CSW Industrials

What's The Opportunity In CSW Industrials?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 2.74% above my intrinsic value, which means if you buy CSW Industrials today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $180.27, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, CSW Industrials has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from CSW Industrials?

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. CSW Industrials' earnings growth are expected to be in the teens in the upcoming year, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? CSWI’s optimistic 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 CSWI, 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 further examining 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. Every company has risks, and we've spotted 1 warning sign for CSW Industrials you should know about.

If you are no longer interested in CSW Industrials, 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.