Stock Analysis

When Should You Buy MYR Group Inc. (NASDAQ:MYRG)?

NasdaqGS:MYRG
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MYR Group Inc. (NASDAQ:MYRG), is not the largest company out there, but it saw a decent share price growth of 10% on the NASDAQGS over the last few months. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. 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 MYR Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for MYR Group

Is MYR Group Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 19.44% above our intrinsic value, which means if you buy MYR Group today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $127.25, 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 MYR Group’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 kind of growth will MYR Group generate?

earnings-and-revenue-growth
NasdaqGS:MYRG Earnings and Revenue Growth May 3rd 2024

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. With profit expected to grow by 31% over the next year, the near-term future seems bright for MYR Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? MYRG’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 tabs on MYRG, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which 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.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. In terms of investment risks, we've identified 1 warning sign with MYR Group, and understanding this should be part of your investment process.

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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.