When Should You Buy Zurn Elkay Water Solutions Corporation (NYSE:ZWS)?

While Zurn Elkay Water Solutions Corporation (NYSE:ZWS) might not have the largest market cap around , it saw a significant share price rise of 24% 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 mid-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 Zurn Elkay Water Solutions’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Zurn Elkay Water Solutions

What Is Zurn Elkay Water Solutions Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 9.2% below our intrinsic value, which means if you buy Zurn Elkay Water Solutions today, you’d be paying a fair price for it. And if you believe the company’s true value is $43.80, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Zurn Elkay Water Solutions’s low beta implies that the stock is less volatile than the wider market.

What does the future of Zurn Elkay Water Solutions look like?

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. 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. With profit expected to grow by 48% over the next couple of years, the future seems bright for Zurn Elkay Water Solutions. 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? ZWS’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 tabs on ZWS, now may not be the most optimal 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.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. While conducting our analysis, we found that Zurn Elkay Water Solutions has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in Zurn Elkay Water Solutions, 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.