Should You Investigate Westinghouse Air Brake Technologies Corporation (NYSE:WAB) At US$146?

Let's talk about the popular Westinghouse Air Brake Technologies Corporation (NYSE:WAB). The company's shares saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. The company is now trading at yearly-high levels following the recent surge in its share price. 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. However, what if the stock is still a bargain? Let’s examine Westinghouse Air Brake Technologies’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Westinghouse Air Brake Technologies

What's The Opportunity In Westinghouse Air Brake Technologies?

According to our valuation model, Westinghouse Air Brake Technologies seems to be fairly priced at around 6.5% below our 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 the company’s true value is $156.02, then there’s not much of an upside to gain from mispricing. 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 kind of growth will Westinghouse Air Brake Technologies 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. Westinghouse Air Brake Technologies' earnings over the next few years are expected to increase by 57%, 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 an eye 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.

So while earnings quality is important, it's equally important to consider the risks facing Westinghouse Air Brake Technologies at this point in time. At Simply Wall St, we found 1 warning sign for Westinghouse Air Brake Technologies and we think they deserve your attention.

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.