Is There Now An Opportunity In RPM International Inc. (NYSE:RPM)?

Today we're going to take a look at the well-established RPM International Inc. (NYSE:RPM). The company's stock led the NYSE gainers with a relatively large price hike in the past couple of weeks. 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 RPM International’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for RPM International

What's The Opportunity In RPM International?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 15.21% above my intrinsic value, which means if you buy RPM International today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $86.58, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, RPM International’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will RPM International generate?

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. RPM International's earnings over the next few years are expected to increase by 52%, 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? RPM’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 RPM, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect 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.

If you want to dive deeper into RPM International, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 2 warning signs with RPM International, and understanding these should be part of your investment process.

If you are no longer interested in RPM International, 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.