Is Now The Time To Look At Buying Moog Inc. (NYSE:MOG.A)?

By
Simply Wall St
Published
September 11, 2021
NYSE:MOG.A
Source: Shutterstock

While Moog Inc. (NYSE:MOG.A) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$90.61 at one point, and dropping to the lows of US$73.48. 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 Moog's current trading price of US$76.15 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 Moog’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 Moog

Is Moog still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 17% below my intrinsic value, which means if you buy Moog today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $91.49, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that Moog’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Moog generate?

earnings-and-revenue-growth
NYSE:MOG.A Earnings and Revenue Growth September 12th 2021

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. In Moog's case, its earnings over the next year are expected to double, indicating an incredibly optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? MOG.A’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 financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on MOG.A, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. You'd be interested to know, that we found 3 warning signs for Moog and you'll want to know about these.

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