While ManpowerGroup Inc. (NYSE:MAN) might not have the largest market cap around , it saw significant share price movement during recent months on the NYSE, rising to highs of US$79.74 and falling to the lows of US$70.35. 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 ManpowerGroup's current trading price of US$75.03 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 ManpowerGroup’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for ManpowerGroup
What's The Opportunity In ManpowerGroup?
ManpowerGroup is currently expensive based on our price multiple model, where we look at the company's price-to-earnings ratio in comparison to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 40.88x is currently well-above the industry average of 26.45x, meaning that it is trading at a more expensive price relative to its peers. But, is there another opportunity to buy low in the future? Since ManpowerGroup’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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 ManpowerGroup generate?
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. ManpowerGroup's 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 MAN’s positive outlook, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe MAN should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio 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 tabs on MAN for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for MAN, 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 ManpowerGroup as a business, it's important to be aware of any risks it's facing. At Simply Wall St, we found 3 warning signs for ManpowerGroup and we think they deserve your attention.
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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.
About NYSE:MAN
Adequate balance sheet average dividend payer.
