Should You Think About Buying John Wiley & Sons, Inc. (NYSE:WLY) Now?

Published
July 15, 2022
NYSE:WLY
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While John Wiley & Sons, Inc. (NYSE:WLY) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the NYSE, rising to highs of US$54.91 and falling to the lows of US$45.64. 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 John Wiley & Sons' current trading price of US$45.64 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 John Wiley & Sons’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for John Wiley & Sons

What is John Wiley & Sons worth?

According to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that John Wiley & Sons’s ratio of 17.16x is trading slightly above its industry peers’ ratio of 12.49x, which means if you buy John Wiley & Sons today, you’d be paying a relatively reasonable price for it. And if you believe John Wiley & Sons should be trading in this range, then there isn’t really any room for the share price grow beyond the levels of other industry peers over the long-term. Furthermore, it seems like John Wiley & Sons’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s priced similarly to industry peers. This is because the stock is less volatile than the wider market given its low beta.

Can we expect growth from John Wiley & Sons?

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NYSE:WLY Earnings and Revenue Growth July 15th 2022

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. John Wiley & Sons' 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? It seems like the market has already priced in WLY’s positive outlook, with shares trading around industry price multiples. 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 WLY? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping tabs on WLY, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for WLY, 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.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. In terms of investment risks, we've identified 2 warning signs with John Wiley & Sons, and understanding them should be part of your investment process.

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

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