Is Clean Harbors, Inc. (NYSE:CLH) Potentially Undervalued?

By
Simply Wall St
Published
April 07, 2022
NYSE:CLH
Source: Shutterstock

While Clean Harbors, Inc. (NYSE:CLH) might not be the most widely known stock at the moment, it saw a significant share price rise of over 20% in the past couple of months on the NYSE. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Clean Harbors’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Clean Harbors

What's the opportunity in Clean Harbors?

Great news for investors – Clean Harbors is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $166.18, but it is currently trading at US$110 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Clean Harbors’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 Clean Harbors?

earnings-and-revenue-growth
NYSE:CLH Earnings and Revenue Growth April 7th 2022

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 profit expected to grow by 63% over the next couple of years, the future seems bright for Clean Harbors. 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? Since CLH 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 financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on CLH for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CLH. 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 buy.

If you want to dive deeper into Clean Harbors, you'd also look into what risks it is currently facing. At Simply Wall St, we found 2 warning signs for Clean Harbors and we think they deserve your attention.

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

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