When Should You Buy Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW)?

While Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) might not be the most widely known stock at the moment, it saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine Atlas Air Worldwide Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Atlas Air Worldwide Holdings

What's the opportunity in Atlas Air Worldwide Holdings?

The stock is currently trading at US$88.94 on the share market, which means it is overvalued by 33% compared to my intrinsic value of $66.67. This means that the opportunity to buy Atlas Air Worldwide Holdings at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Atlas Air Worldwide Holdings’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.

What does the future of Atlas Air Worldwide Holdings look like?

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 negative profit growth of -17% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Atlas Air Worldwide Holdings. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? If you believe AAWW 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. Given the risk from a negative growth outlook, this could be the right time to reduce your total portfolio risk. 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 an eye on AAWW for a while, now may not be the best time to enter into the stock. Its price has risen beyond its true value, on top of a negative future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?

If you want to dive deeper into Atlas Air Worldwide Holdings, you'd also look into what risks it is currently facing. Case in point: We've spotted 2 warning signs for Atlas Air Worldwide Holdings you should be mindful of and 1 of them makes us a bit uncomfortable.

If you are no longer interested in Atlas Air Worldwide Holdings, 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.