What Does Casella Waste Systems, Inc.'s (NASDAQ:CWST) Share Price Indicate?

Casella Waste Systems, Inc. (NASDAQ:CWST), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$112 and falling to the lows of US$85.76. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Casella Waste Systems' current trading price of US$85.76 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Casella Waste Systems’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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What's The Opportunity In Casella Waste Systems?

According to our valuation model, the stock is currently overvalued by about 23%, trading at US$85.76 compared to our intrinsic value of $69.94. This means that the buying opportunity has probably disappeared for now. Another thing to keep in mind is that Casella Waste Systems’s share price is quite stable relative to the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

See our latest analysis for Casella Waste Systems

Can we expect growth from Casella Waste Systems?

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. Casella Waste Systems' earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in CWST’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe CWST should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on CWST for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for CWST, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Casella Waste Systems as a business, it's important to be aware of any risks it's facing. Our analysis shows 3 warning signs for Casella Waste Systems (1 is concerning!) and we strongly recommend you look at them before investing.

If you are no longer interested in Casella Waste Systems, 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.