Is Now The Time To Look At Buying Westinghouse Air Brake Technologies Corporation (NYSE:WAB)?

Today we're going to take a look at the well-established Westinghouse Air Brake Technologies Corporation (NYSE:WAB). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. The recent share price gains has brought the company back closer to its yearly peak. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine Westinghouse Air Brake Technologies’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Westinghouse Air Brake Technologies

What Is Westinghouse Air Brake Technologies Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 0.64% above our intrinsic value, which means if you buy Westinghouse Air Brake Technologies today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $158.33, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Westinghouse Air Brake Technologies’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Westinghouse Air Brake Technologies look like?

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. Westinghouse Air Brake Technologies' earnings over the next few years are expected to increase by 54%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in WAB’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on WAB, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect 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 want to dive deeper into Westinghouse Air Brake Technologies, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Westinghouse Air Brake Technologies has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in Westinghouse Air Brake Technologies, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com