Is Now The Time To Look At Buying The ODP Corporation (NASDAQ:ODP)?

The ODP Corporation (NASDAQ:ODP), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the NASDAQGS over the last few months. While good news for shareholders, the company has traded much higher in the past year. As a small cap stock, which tends to lack high analyst coverage, 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 take a look at ODP’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Is ODP Still Cheap?

Good news, investors! ODP is still a bargain right now. According to our valuation, the intrinsic value for the stock is $35.98, but it is currently trading at US$22.21 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, ODP’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.

See our latest analysis for ODP

Can we expect growth from ODP?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 a relatively muted profit growth of 4.8% expected over the next year, growth doesn’t seem like a key driver for a buy decision for ODP, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since ODP is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on ODP for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ODP. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

So while earnings quality is important, it's equally important to consider the risks facing ODP at this point in time. For example - ODP has 2 warning signs we think you should be aware of.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.