Is Now An Opportune Moment To Examine Textainer Group Holdings Limited (NYSE:TGH)?

Textainer Group Holdings Limited (NYSE:TGH), might not be a large cap stock, but it saw significant share price movement during recent months on the NYSE, rising to highs of US$40.19 and falling to the lows of US$30.43. 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 Textainer Group Holdings' current trading price of US$32.15 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 Textainer Group Holdings’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 Textainer Group Holdings

What is Textainer Group Holdings worth?

Great news for investors – Textainer Group Holdings is still trading at a fairly cheap price 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 Textainer Group Holdings’s ratio of 5.43x is below its peer average of 13.15x, which indicates the stock is trading at a lower price compared to the Trade Distributors industry. Although, there may be another chance to buy again in the future. This is because Textainer Group Holdings’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Textainer Group Holdings 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. Though in the case of Textainer Group Holdings, it is expected to deliver a relatively unexciting earnings growth of 8.8%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Textainer Group Holdings, at least in the near term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since TGH is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on TGH for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy TGH. 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'd like to know more about Textainer Group Holdings as a business, it's important to be aware of any risks it's facing. When we did our research, we found 4 warning signs for Textainer Group Holdings (2 are a bit concerning!) that we believe deserve your full attention.

If you are no longer interested in Textainer Group Holdings, 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.