What Does UFP Industries, Inc.'s (NASDAQ:UFPI) Share Price Indicate?

While UFP Industries, Inc. (NASDAQ:UFPI) might not be the most widely known stock at the moment, it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. 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 UFP Industries’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for UFP Industries

Is UFP Industries Still Cheap?

Good news, investors! UFP Industries is still a bargain right now. According to my valuation, the intrinsic value for the stock is $105.72, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that UFP Industries’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 UFP Industries generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 -13% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for UFP Industries. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although UFPI is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio exposure to UFPI, 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 an eye on UFPI for a while, but hesitant on making the leap, I recommend you dig deeper 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.

If you'd like to know more about UFP Industries as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with UFP Industries, and understanding it should be part of your investment process.

If you are no longer interested in UFP Industries, 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.