Stock Analysis

At US$46.59, Is It Time To Put Taylor Morrison Home Corporation (NYSE:TMHC) On Your Watch List?

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NYSE:TMHC
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While Taylor Morrison Home Corporation (NYSE:TMHC) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price increase on the NYSE over the last few months. 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. But what if there is still an opportunity to buy? Let’s examine Taylor Morrison Home’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Taylor Morrison Home

Is Taylor Morrison Home Still Cheap?

According to my valuation model, the stock is currently overvalued by about 28%, trading at US$46.59 compared to my intrinsic value of $36.38. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Given that Taylor Morrison Home’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Taylor Morrison Home generate?

earnings-and-revenue-growth
NYSE:TMHC Earnings and Revenue Growth December 3rd 2023

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. Though in the case of Taylor Morrison Home, it is expected to deliver a negative earnings growth of -18%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? If you believe TMHC should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the uncertainty from negative growth in the future, this could be the right time to reduce your total portfolio risk. 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 an eye on TMHC for a while, now may not be the best time to enter into the stock. you may want to reconsider buying the stock at this time. The company’s price has climbed passed its true value, in addition to a risky future outlook. However, there are also other important factors which we haven’t considered today, such as the track record of its management. Should the price fall in the future, will you be well-informed enough to buy?

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. You'd be interested to know, that we found 1 warning sign for Taylor Morrison Home and you'll want to know about this.

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

Valuation is complex, but we're helping make it simple.

Find out whether Taylor Morrison Home is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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