When Should You Buy Ritchie Bros. Auctioneers Incorporated (NYSE:RBA)?

By
Simply Wall St
Published
October 11, 2021
NYSE:RBA
Source: Shutterstock

While Ritchie Bros. Auctioneers Incorporated (NYSE:RBA) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the NYSE, rising to highs of US$64.97 and falling to the lows of US$58.17. 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 Ritchie Bros. Auctioneers' current trading price of US$63.66 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 Ritchie Bros. Auctioneers’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Ritchie Bros. Auctioneers

What is Ritchie Bros. Auctioneers worth?

Good news, investors! Ritchie Bros. Auctioneers is still a bargain right now. According to my valuation, the intrinsic value for the stock is $81.75, 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, Ritchie Bros. Auctioneers’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 does the future of Ritchie Bros. Auctioneers look like?

earnings-and-revenue-growth
NYSE:RBA Earnings and Revenue Growth October 11th 2021

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. Ritchie Bros. Auctioneers' earnings over the next few years are expected to increase by 54%, 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 RBA is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic 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 RBA 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 RBA. 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 investment decision.

If you want to dive deeper into Ritchie Bros. Auctioneers, you'd also look into what risks it is currently facing. For example - Ritchie Bros. Auctioneers has 2 warning signs we think you should be aware of.

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

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.

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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.