When Should You Buy Tractor Supply Company (NASDAQ:TSCO)?

Today we're going to take a look at the well-established Tractor Supply Company (NASDAQ:TSCO). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. The company is inching closer to its yearly highs following the recent share price climb. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine Tractor Supply’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Tractor Supply

Is Tractor Supply Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 15.13% above our intrinsic value, which means if you buy Tractor Supply today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $250.65, there’s only an insignificant downside when the price falls to its real value. What's more, Tractor Supply’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Tractor Supply 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. Tractor Supply's earnings over the next few years are expected to increase by 24%, 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? TSCO’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 confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on TSCO, 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.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. You'd be interested to know, that we found 1 warning sign for Tractor Supply and you'll want to know about it.

If you are no longer interested in Tractor Supply, 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.