Should You Think About Buying Sterling Infrastructure, Inc. (NASDAQ:STRL) Now?

Sterling Infrastructure, Inc. (NASDAQ:STRL), 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$201 and falling to the lows of US$109. 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 Sterling Infrastructure's current trading price of US$118 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Sterling Infrastructure’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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Is Sterling Infrastructure Still Cheap?

Great news for investors – Sterling Infrastructure is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $191.22, but it is currently trading at US$118 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Sterling Infrastructure’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

View our latest analysis for Sterling Infrastructure

What kind of growth will Sterling Infrastructure generate?

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. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a negative profit growth of -0.6% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Sterling Infrastructure. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although STRL is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. We recommend you think about whether you want to increase your portfolio exposure to STRL, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on STRL for some time, but hesitant on making the leap, we recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

So while earnings quality is important, it's equally important to consider the risks facing Sterling Infrastructure at this point in time. To help with this, we've discovered 3 warning signs (1 can't be ignored!) that you ought to be aware of before buying any shares in Sterling Infrastructure.

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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.