At US$60.30, Is nVent Electric plc (NYSE:NVT) Worth Looking At Closely?

nVent Electric plc (NYSE:NVT) received a lot of attention from a substantial price increase on the NYSE over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. 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. However, what if the stock is still a bargain? Let’s examine nVent Electric’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

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What's The Opportunity In nVent Electric?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 15% below our intrinsic value, which means if you buy nVent Electric today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $70.88, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since nVent Electric’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.

See our latest analysis for nVent Electric

What kind of growth will nVent Electric generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 more than double over the next couple of years, the future seems bright for nVent Electric. 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? NVT’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 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 NVT, 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about nVent Electric as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with nVent Electric, and understanding it should be part of your investment process.

If you are no longer interested in nVent Electric, 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.