At US$38.12, Is It Time To Put WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) On Your Watch List?

WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NASDAQCM over the last few months, increasing to US$46.85 at one point, and dropping to the lows of US$36.61. 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 WillScot Mobile Mini Holdings' current trading price of US$38.12 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 WillScot Mobile Mini Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for WillScot Mobile Mini Holdings

What's The Opportunity In WillScot Mobile Mini Holdings?

The share price seems sensible at the moment according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that WillScot Mobile Mini Holdings’s ratio of 22.53x is trading slightly below its industry peers’ ratio of 25.23x, which means if you buy WillScot Mobile Mini Holdings today, you’d be paying a reasonable price for it. And if you believe WillScot Mobile Mini Holdings should be trading in this range, then there isn’t much room for the share price to grow beyond the levels of other industry peers over the long-term. Although, there may be an opportunity to buy in the future. This is because WillScot Mobile Mini Holdings’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.

Can we expect growth from WillScot Mobile Mini Holdings?

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. WillScot Mobile Mini Holdings' earnings over the next few years are expected to increase by 50%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in WSC’s positive outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at WSC? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on WSC, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for WSC, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing WillScot Mobile Mini Holdings at this point in time. For example - WillScot Mobile Mini Holdings has 1 warning sign we think you should be aware of.

If you are no longer interested in WillScot Mobile Mini Holdings, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com