Is There Now An Opportunity In Quaker Chemical Corporation (NYSE:KWR)?

While Quaker Chemical Corporation (NYSE:KWR) might not be the most widely known stock at the moment, it saw a significant share price rise of over 20% in the past couple of months on the NYSE. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine Quaker Chemical’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Quaker Chemical

What Is Quaker Chemical Worth?

Quaker Chemical appears to be overvalued by 23% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$191 on the market compared to my intrinsic value of $155.63. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Given that Quaker Chemical’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 Quaker Chemical look like?

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. With profit expected to more than double over the next couple of years, the future seems bright for Quaker Chemical. It looks like higher cash flow 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 KWR’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 KWR 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 tabs on KWR for some time, 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 positive outlook is encouraging for KWR, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Quaker Chemical, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 3 warning signs for Quaker Chemical you should know about.

If you are no longer interested in Quaker Chemical, 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.