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

While John Wiley & Sons, Inc. (NYSE:WLY) might not have the largest market cap around , it saw a decent share price growth of 20% on the NYSE over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine John Wiley & Sons’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for John Wiley & Sons

Is John Wiley & Sons Still Cheap?

According to our valuation model, John Wiley & Sons seems to be fairly priced at around 5.83% above our intrinsic value, which means if you buy John Wiley & Sons today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $33.02, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, John Wiley & Sons’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will John Wiley & Sons generate?

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. However, with an expected decline of -8.8% in revenues over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for John Wiley & Sons. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? WLY seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on WLY for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on WLY should the price fluctuate below its true value.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. At Simply Wall St, we found 2 warning signs for John Wiley & Sons and we think they deserve your attention.

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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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.