Is It Time To Consider Buying Tutor Perini Corporation (NYSE:TPC)?

Tutor Perini Corporation (NYSE:TPC), 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. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at Tutor Perini’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Tutor Perini

What's The Opportunity In Tutor Perini?

According to my valuation model, the stock is currently overvalued by about 27%, trading at US$8.05 compared to my intrinsic value of $6.35. This means that the opportunity to buy Tutor Perini at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Tutor Perini’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 Tutor Perini?

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 grow by 94% over the next year, the near-term future seems bright for Tutor Perini. 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? It seems like the market has well and truly priced in TPC’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe TPC should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on TPC for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for TPC, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Tutor Perini at this point in time. Every company has risks, and we've spotted 1 warning sign for Tutor Perini you should know about.

If you are no longer interested in Tutor Perini, 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.