At US$21.41, Is PowerSchool Holdings, Inc. (NYSE:PWSC) Worth Looking At Closely?

PowerSchool Holdings, Inc. (NYSE:PWSC), is not the largest company out there, but it saw significant share price movement during recent months on the NYSE, rising to highs of US$25.02 and falling to the lows of US$20.17. 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 PowerSchool Holdings' current trading price of US$21.41 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 PowerSchool Holdings’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 PowerSchool Holdings

What's The Opportunity In PowerSchool Holdings?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 20% below our intrinsic value, which means if you buy PowerSchool Holdings today, you’d be paying a fair price for it. And if you believe that the stock is really worth $26.74, then there’s not much of an upside to gain from mispricing. Furthermore, PowerSchool Holdings’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will PowerSchool Holdings 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. PowerSchool Holdings' earnings over the next few years are expected to increase by 89%, 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? PWSC’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 financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on PWSC, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into 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 2 warning signs for PowerSchool Holdings and you'll want to know about them.

If you are no longer interested in PowerSchool Holdings, 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.