Is Installed Building Products, Inc. (NYSE:IBP) Potentially Undervalued?

Installed Building Products, Inc. (NYSE:IBP), which is in the consumer durables business, and is based in United States, led the NYSE gainers with a relatively large price hike in the past couple of weeks. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Installed Building Products’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Installed Building Products

What’s the opportunity in Installed Building Products?

Good news, investors! Installed Building Products is still a bargain right now. According to my valuation, the intrinsic value for the stock is $74.13, but it is currently trading at US$43.84 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Installed Building Products’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of Installed Building Products look like?

NYSE:IBP Past and Future Earnings, March 20th 2019
NYSE:IBP Past and Future Earnings, March 20th 2019
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. Installed Building Products’s earnings over the next few years are expected to increase by 80%, 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 IBP 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 IBP for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy IBP. 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.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Installed Building Products. You can find everything you need to know about Installed Building Products in the latest infographic research report. If you are no longer interested in Installed Building Products, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.