Why Bentley Systems, Incorporated (NASDAQ:BSY) Could Be Worth Watching

Today we're going to take a look at the well-established Bentley Systems, Incorporated (NASDAQ:BSY). The company's stock saw a decent share price growth of 13% on the NASDAQGS 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. 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 Bentley Systems’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Bentley Systems

What Is Bentley Systems Worth?

According to our valuation model, the stock is currently overvalued by about 26%, trading at US$50.81 compared to our intrinsic value of $40.30. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Given that Bentley Systems’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Bentley Systems 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 a relatively muted profit growth of 3.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Bentley Systems, at least in the short term.

What This Means For You

Are you a shareholder? BSY’s future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe BSY should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on BSY for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook means it’s worth diving deeper into other factors 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. While conducting our analysis, we found that Bentley Systems has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in Bentley Systems, 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.