Stock Analysis

Is Quanex Building Products Corporation (NYSE:NX) Potentially Undervalued?

NYSE:NX
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Quanex Building Products Corporation (NYSE:NX), is not the largest company out there, but it saw a significant share price rise of over 20% in the past couple of months on the NYSE. As a 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 Quanex Building Products’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Quanex Building Products

What is Quanex Building Products worth?

Good news, investors! Quanex Building Products is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $35.81, but it is currently trading at US$24.09 on the share market, meaning that there is still an opportunity to buy now. However, given that Quanex Building Products’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Quanex Building Products?

earnings-and-revenue-growth
NYSE:NX Earnings and Revenue Growth July 22nd 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. 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. However, with a relatively muted profit growth of 9.4% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Quanex Building Products, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since NX is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on NX for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy NX. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

It can be quite valuable to consider what analysts expect for Quanex Building Products from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.

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

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Find out whether Quanex Building Products 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.