TPI Composites, Inc. (NASDAQ:TPIC), which is in the electrical business, and is based in United States, saw a decent share price growth in the teens level on the NASDAQGM over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine TPI Composites’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
See our latest analysis for TPI Composites
Is TPI Composites still cheap?
The stock is currently trading at US$11.01 on the share market, which means it is overvalued by 37% compared to my intrinsic value of $8.01. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Given that TPI Composites’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will TPI Composites 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. With revenues expected to grow by 32% over the next couple of years, the future seems bright for TPI Composites. If the level of expenses is able to be maintained, 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 TPIC’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 TPIC 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 TPIC 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 TPIC, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on TPI Composites. You can find everything you need to know about TPI Composites in the latest infographic research report. If you are no longer interested in TPI Composites, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.