Is Casey's General Stores, Inc. (NASDAQ:CASY) Potentially Undervalued?

Today we're going to take a look at the well-established Casey's General Stores, Inc. (NASDAQ:CASY). The company's stock saw a significant share price rise of 29% in the past couple of months on the NASDAQGS. The recent jump in the share price has meant that the company is trading at close to its 52-week high. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine Casey's General Stores’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Casey's General Stores

Is Casey's General Stores Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 3.41% above our intrinsic value, which means if you buy Casey's General Stores today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $364.15, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, Casey's General Stores has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from Casey's General Stores?

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. Casey's General Stores' earnings over the next few years are expected to increase by 23%, 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? CASY’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on CASY, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Casey's General Stores at this point in time. Every company has risks, and we've spotted 1 warning sign for Casey's General Stores you should know about.

If you are no longer interested in Casey's General Stores, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com