AerCap Holdings NV (NYSE:AER), a trade distributors company based in Ireland, saw significant share price volatility over the past couple of months on the NYSE, rising to the highs of $55.97 and falling to the lows of $49.55. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether AerCap Holdings’s current trading price of $53.92 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 AerCap Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View out our latest analysis for AerCap Holdings
What is AerCap Holdings worth?Good news, investors! AerCap Holdings is still a bargain right now. In this instance, I’ve used the price-to-equity (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that AerCap Holdings’s ratio of 7.75x is below its peer average of 14.12x, which suggests the stock is undervalued compared to the Trade Distributors industry. Although, there may be another chance to buy again in the future. This is because AerCap 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.
What kind of growth will AerCap Holdings 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 -5.38% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for AerCap Holdings. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Although AER is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to AER, 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 AER for some time, 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on AerCap Holdings. You can find everything you need to know about AerCap Holdings in the latest infographic research report. If you are no longer interested in AerCap Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.