Is There Now An Opportunity In Heritage-Crystal Clean, Inc (NASDAQ:HCCI)?

Heritage-Crystal Clean, Inc (NASDAQ:HCCI), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Heritage-Crystal Clean’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Heritage-Crystal Clean

What's The Opportunity In Heritage-Crystal Clean?

Good news, investors! Heritage-Crystal Clean is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Heritage-Crystal Clean’s ratio of 10.65x is below its peer average of 19.75x, which indicates the stock is trading at a lower price compared to the Commercial Services industry. What’s more interesting is that, Heritage-Crystal Clean’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Heritage-Crystal Clean 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. Though in the case of Heritage-Crystal Clean, it is expected to deliver a relatively unexciting earnings growth of 2.5%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Heritage-Crystal Clean, at least in the near term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since HCCI is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on HCCI for a while, now might be the time to enter the stock. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy HCCI. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. When we did our research, we found 2 warning signs for Heritage-Crystal Clean (1 is significant!) that we believe deserve your full attention.

If you are no longer interested in Heritage-Crystal Clean, 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.