What Is Maxar Technologies Inc.'s (NYSE:MAXR) Share Price Doing?

Maxar Technologies Inc. (NYSE:MAXR), is not the largest company out there, but it saw significant share price movement during recent months on the NYSE, rising to highs of US$39.46 and falling to the lows of US$24.42. 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 Maxar Technologies' current trading price of US$26.58 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Maxar Technologies’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Maxar Technologies

What's the opportunity in Maxar Technologies?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Maxar Technologies’s ratio of 15.93x is trading slightly below its industry peers’ ratio of 18.6x, which means if you buy Maxar Technologies today, you’d be paying a decent price for it. And if you believe that Maxar Technologies should be trading at this level in the long run, then there’s not much of an upside to gain over and above other industry peers. Is there another opportunity to buy low in the future? Since Maxar Technologies’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.

What kind of growth will Maxar Technologies 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. With profit expected to grow by 34% over the next couple of years, the future seems bright for Maxar Technologies. 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? MAXR’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. 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 MAXR? 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 MAXR, 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 MAXR, 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.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example, Maxar Technologies has 2 warning signs (and 1 which can't be ignored) we think you should know about.

If you are no longer interested in Maxar Technologies, 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.