Should You Investigate Westinghouse Air Brake Technologies Corporation (NYSE:WAB) At US$112?

Westinghouse Air Brake Technologies Corporation (NYSE:WAB) led the NYSE gainers with a relatively large price hike in the past couple of weeks. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today I will analyse the most recent data on Westinghouse Air Brake Technologies’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Westinghouse Air Brake Technologies

What's The Opportunity In Westinghouse Air Brake Technologies?

According to my valuation model, Westinghouse Air Brake Technologies seems to be fairly priced at around 15% below my intrinsic value, which means if you buy Westinghouse Air Brake Technologies today, you’d be paying a fair price for it. And if you believe that the stock is really worth $132.18, then there isn’t much room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Westinghouse Air Brake Technologies’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 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. With profit expected to grow by 68% over the next couple of years, the future seems bright for Westinghouse Air Brake Technologies. 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 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 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 tabs on WAB, 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 further examining 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. You'd be interested to know, that we found 1 warning sign for Westinghouse Air Brake Technologies and you'll want to know about 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.