At US$59.97, Is It Time To Put Rush Enterprises, Inc. (NASDAQ:RUSH.B) On Your Watch List?

Rush Enterprises, Inc. (NASDAQ:RUSH.B), is not the largest company out there, but it saw a decent share price growth in the teens level on the NASDAQGS over the last few months. 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 Rush Enterprises’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Rush Enterprises

Is Rush Enterprises Still Cheap?

According to my valuation model, Rush Enterprises seems to be fairly priced at around 3.99% above my intrinsic value, which means if you buy Rush Enterprises today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $57.67, there’s only an insignificant downside when the price falls to its real value. In addition to this, Rush Enterprises has a low beta, which suggests its share price is less volatile than the wider market.

What does the future of Rush Enterprises 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 negative profit growth of -19% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Rush Enterprises. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? RUSH.B seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on RUSH.B for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on RUSH.B should the price fluctuate below its true value.

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. Be aware that Rush Enterprises is showing 2 warning signs in our investment analysis and 1 of those makes us a bit uncomfortable...

If you are no longer interested in Rush Enterprises, 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.