At US$28.25, Is It Time To Put SP Plus Corporation (NASDAQ:SP) On Your Watch List?

By
Simply Wall St
Published
November 29, 2021
NasdaqGS:SP
Source: Shutterstock

While SP Plus Corporation (NASDAQ:SP) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$33.72 and falling to the lows of US$28.25. 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 SP Plus' current trading price of US$28.25 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at SP Plus’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for SP Plus

Is SP Plus still cheap?

Great news for investors – SP Plus is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $42.07, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, SP Plus’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.

Can we expect growth from SP Plus?

earnings-and-revenue-growth
NasdaqGS:SP Earnings and Revenue Growth November 30th 2021

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. In the upcoming year, SP Plus' earnings are expected to increase by 85%, 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? Since SP is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

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

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Our analysis shows 2 warning signs for SP Plus (1 is a bit unpleasant!) and we strongly recommend you look at these before investing.

If you are no longer interested in SP Plus, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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