Today we’re going to take a look at the well-established TD Ameritrade Holding Corporation (NASDAQ:AMTD). The company’s stock saw a double-digit share price rise of over 10% in the past couple of months on the NasdaqGS. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s take a look at TD Ameritrade Holding’s outlook and value based on the most recent financial data to see if the opportunity still exists. Check out our latest analysis for TD Ameritrade Holding
Is TD Ameritrade Holding still cheap?According to my valuation model, the stock is currently overvalued by about 26%, trading at US$59.03 compared to my intrinsic value of $46.82. This means that the opportunity to buy TD Ameritrade Holding at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that TD Ameritrade Holding’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 does the future of TD Ameritrade Holding look like?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. With profit expected to more than double over the next couple of years, the future seems bright for TD Ameritrade Holding. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in AMTD’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe AMTD 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. 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 AMTD for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for AMTD, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on TD Ameritrade Holding. You can find everything you need to know about TD Ameritrade Holding in the latest infographic research report. If you are no longer interested in TD Ameritrade Holding, you can use our free platform to see my list of over 50 other stocks with a high growth potential.