At US$23.23, Is PGT Innovations, Inc. (NYSE:PGTI) Worth Looking At Closely?

By
Simply Wall St
Published
July 01, 2021
NYSE:PGTI
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PGT Innovations, Inc. (NYSE:PGTI), 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$27.72 and falling to the lows of US$21.95. 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 Innovations' current trading price of US$23.23 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 Innovations’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Innovations

What is Innovations worth?

Good news, investors! Innovations is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $36.10, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Innovations’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.

What does the future of Innovations look like?

earnings-and-revenue-growth
NYSE:PGTI Earnings and Revenue Growth July 1st 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. 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 Innovations. 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? Since PGTI is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on PGTI for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy PGTI. 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.

If you want to dive deeper into Innovations, you'd also look into what risks it is currently facing. To that end, you should learn about the 3 warning signs we've spotted with Innovations (including 1 which is a bit concerning).

If you are no longer interested in Innovations, 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. 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.
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