Stock Analysis

Is It Time To Consider Buying Allegion plc (NYSE:ALLE)?

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NYSE:ALLE
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While Allegion plc (NYSE:ALLE) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the NYSE, rising to highs of US$132 and falling to the lows of US$110. 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 Allegion's current trading price of US$113 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 Allegion’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 Allegion

Is Allegion still cheap?

According to my valuation model, Allegion seems to be fairly priced at around 6.7% below my intrinsic value, which means if you buy Allegion today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $121.38, then there isn’t much room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Allegion’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Allegion?

earnings-and-revenue-growth
NYSE:ALLE Earnings and Revenue Growth March 24th 2022

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 profit expected to grow by 33% over the next couple of years, the future seems bright for Allegion. 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 already priced in ALLE’s positive outlook, with shares trading around its fair value. 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 the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on ALLE, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. While conducting our analysis, we found that Allegion has 2 warning signs and it would be unwise to ignore these.

If you are no longer interested in Allegion, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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