Is Now An Opportune Moment To Examine Rush Enterprises, Inc. (NASDAQ:RUSH.B)?

While Rush Enterprises, Inc. (NASDAQ:RUSH.B) might not be the most widely known stock at the moment, it saw a significant share price rise of over 20% in the past couple of months on the NASDAQGS. 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? Today I will analyse the most recent data on Rush Enterprises’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Rush Enterprises

Is Rush Enterprises still cheap?

According to my valuation model, the stock is currently overvalued by about 40%, trading at US$48.78 compared to my intrinsic value of $34.90. This means that the opportunity to buy Rush Enterprises at a good price has disappeared! But, is there another opportunity to buy low in the future? Since Rush Enterprises’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.

Can we expect growth from Rush Enterprises?

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 a double-digit 14% over the next couple of years, the outlook is positive for Rush Enterprises. 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? It seems like the market has well and truly priced in RUSH.B’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe RUSH.B should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on RUSH.B for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for RUSH.B, which means it’s worth diving deeper into other factors 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. For example - Rush Enterprises has 2 warning signs we think you should be aware of.

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.