Stock Analysis

Is It Too Late To Consider Buying Graco Inc. (NYSE:GGG)?

NYSE:GGG
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Let's talk about the popular Graco Inc. (NYSE:GGG). The company's shares saw a decent share price growth of 13% on the NYSE over the last few months. The company is now trading at yearly-high levels following the recent surge in its share price. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at Graco’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Graco

What's The Opportunity In Graco?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 10% below our intrinsic value, which means if you buy Graco today, you’d be paying a fair price for it. And if you believe that the stock is really worth $103.94, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Graco’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Graco?

earnings-and-revenue-growth
NYSE:GGG Earnings and Revenue Growth March 17th 2024

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. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 23% over the next couple of years, the future seems bright for Graco. 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? GGG’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. 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 tabs on GGG, 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 diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Graco, you'd also look into what risks it is currently facing. Case in point: We've spotted 1 warning sign for Graco you should be aware of.

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

Valuation is complex, but we're helping make it simple.

Find out whether Graco is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.