Is It Time To Consider Buying Teledyne Technologies Incorporated (NYSE:TDY)?

By
Simply Wall St
Published
October 31, 2021
NYSE:TDY
Source: Shutterstock

Let's talk about the popular Teledyne Technologies Incorporated (NYSE:TDY). The company's shares received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$463 at one point, and dropping to the lows of US$418. 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 Teledyne Technologies' current trading price of US$449 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Teledyne Technologies’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 Teledyne Technologies

Is Teledyne Technologies still cheap?

According to my valuation model, Teledyne Technologies seems to be fairly priced at around 13% below my intrinsic value, which means if you buy Teledyne Technologies today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $514.66, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Teledyne Technologies’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Teledyne Technologies generate?

earnings-and-revenue-growth
NYSE:TDY Earnings and Revenue Growth November 1st 2021

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. Teledyne Technologies' earnings over the next few years are expected to increase by 82%, 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? TDY’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 tabs on TDY, now may not be the most advantageous 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.

If you want to dive deeper into Teledyne Technologies, you'd also look into what risks it is currently facing. For instance, we've identified 3 warning signs for Teledyne Technologies (1 makes us a bit uncomfortable) you should be familiar with.

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

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