At US$583, Is It Time To Put United Rentals, Inc. (NYSE:URI) On Your Watch List?

Let's talk about the popular United Rentals, Inc. (NYSE:URI). The company's shares saw significant share price movement during recent months on the NYSE, rising to highs of US$790 and falling to the lows of US$552. 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 United Rentals' current trading price of US$583 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at United Rentals’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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What's The Opportunity In United Rentals?

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 United Rentals today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $682.59, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since United Rentals’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.

Check out our latest analysis for United Rentals

Can we expect growth from United Rentals?

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 grow by 28% over the next couple of years, the future seems bright for United Rentals. 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? URI’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 track record of its management team. 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 an eye on URI, 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 diving deeper into 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 United Rentals as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that United Rentals has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in United Rentals, 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.