What Is Great Lakes Dredge & Dock Corporation's (NASDAQ:GLDD) Share Price Doing?

Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$12.73 and falling to the lows of US$11.08. 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 Great Lakes Dredge & Dock's current trading price of US$12.02 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 Great Lakes Dredge & Dock’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 Great Lakes Dredge & Dock

What's The Opportunity In Great Lakes Dredge & Dock?

Great news for investors – Great Lakes Dredge & Dock is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Great Lakes Dredge & Dock’s ratio of 13.68x is below its peer average of 36.42x, which indicates the stock is trading at a lower price compared to the Construction industry. What’s more interesting is that, Great Lakes Dredge & Dock’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Great Lakes Dredge & Dock 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. 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 profit growth of 7.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Great Lakes Dredge & Dock, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since GLDD is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on GLDD for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy GLDD. 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 assessment.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Our analysis shows 2 warning signs for Great Lakes Dredge & Dock (1 is a bit unpleasant!) and we strongly recommend you look at them before investing.

If you are no longer interested in Great Lakes Dredge & Dock, 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.