Is Envista Holdings Corporation (NYSE:NVST) Potentially Undervalued?

By
Simply Wall St
Published
September 29, 2021
NYSE:NVST
Source: Shutterstock

Envista Holdings Corporation (NYSE:NVST), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$44.09 at one point, and dropping to the lows of US$39.75. 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 Envista Holdings' current trading price of US$42.89 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 Envista Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Envista Holdings

What's the opportunity in Envista Holdings?

Great news for investors – Envista Holdings is still trading at a fairly cheap price according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 22.62x is currently well-below the industry average of 48.48x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Envista Holdings’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.

Can we expect growth from Envista Holdings?

earnings-and-revenue-growth
NYSE:NVST Earnings and Revenue Growth September 30th 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. Envista Holdings' earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since NVST is currently below the industry PE ratio, it may be a great time to accumulate more of 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 price multiple.

Are you a potential investor? If you’ve been keeping an eye on NVST for a while, now might be the time to enter the stock. Its prosperous future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy NVST. 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 investment decision.

If you want to dive deeper into Envista Holdings, you'd also look into what risks it is currently facing. You'd be interested to know, that we found 1 warning sign for Envista Holdings and you'll want to know about it.

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

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