Stock Analysis
AMERCO (NASDAQ:UHAL) received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$632 at one point, and dropping to the lows of US$527. 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 AMERCO's current trading price of US$568 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 AMERCO’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for AMERCO
Is AMERCO still cheap?
Good news, investors! AMERCO is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that AMERCO’s ratio of 18.25x is below its peer average of 26.05x, which indicates the stock is trading at a lower price compared to the Transportation industry. What’s more interesting is that, AMERCO’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move closer to its industry peers, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will AMERCO generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Though in the case of AMERCO, it is expected to deliver a relatively unexciting earnings growth of 4.5%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for AMERCO, at least in the near term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since UHAL is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping an eye on UHAL for a while, now might be the time to enter the stock. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy UHAL. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. At Simply Wall St, we found 1 warning sign for AMERCO and we think they deserve your attention.
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What are the risks and opportunities for U-Haul Holding?
U-Haul Holding Company operates as a do-it-yourself moving and storage operator for household and commercial goods in the United States and Canada.
Rewards
Price-To-Earnings ratio (10.9x) is below the US market (14.4x)
Risks
Has a high level of debt
Further research on
U-Haul Holding
This article by Simply Wall St is general in nature. 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.
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About NYSE:UHAL
U-Haul Holding
U-Haul Holding Company operates as a do-it-yourself moving and storage operator for household and commercial goods in the United States and Canada.
Mediocre balance sheet and slightly overvalued.
