Stock Analysis

Should You Buy Casella Waste Systems Inc (NASDAQ:CWST) At $23.7?

NasdaqGS:CWST
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Casella Waste Systems Inc (NASDAQ:CWST), a commercial services company based in United States, saw a decent share price growth in the teens level on the NasdaqGS over the last few months. As a 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? Let’s examine Casella Waste Systems’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. View our latest analysis for Casella Waste Systems

What's the opportunity in Casella Waste Systems?

According to my valuation model, Casella Waste Systems seems to be fairly priced at around 7% above my intrinsic value, which means if you buy Casella Waste Systems today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $22.15, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Casella Waste Systems’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.

What kind of growth will Casella Waste Systems generate?

NasdaqGS:CWST Future Profit Mar 13th 18
NasdaqGS:CWST Future Profit Mar 13th 18
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. 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 revenues expected to grow by a double-digit 13.44% over the next couple of years, the outlook is positive for Casella Waste Systems. If the level of expenses is able to be maintained, it looks like higher cash flows 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 CWST’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 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 CWST, 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.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Casella Waste Systems. You can find everything you need to know about Casella Waste Systems in the latest infographic research report. If you are no longer interested in Casella Waste Systems, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

Valuation is complex, but we're helping make it simple.

Find out whether Casella Waste Systems is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.