Is Werner Enterprises, Inc. (NASDAQ:WERN) Potentially Undervalued?

Werner Enterprises, Inc. (NASDAQ:WERN), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$44.84 at one point, and dropping to the lows of US$37.16. 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 Werner Enterprises' current trading price of US$40.59 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 Werner Enterprises’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 Werner Enterprises

Is Werner Enterprises Still Cheap?

According to my valuation model, Werner Enterprises seems to be fairly priced at around 16.85% above my intrinsic value, which means if you buy Werner Enterprises today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $34.74, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Werner Enterprises’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of Werner Enterprises look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Werner Enterprises, it is expected to deliver a negative earnings growth of -12%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Currently, WERN appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on WERN for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on WERN should the price fluctuate below its true value.

So while earnings quality is important, it's equally important to consider the risks facing Werner Enterprises at this point in time. For example, Werner Enterprises has 2 warning signs (and 1 which is significant) we think you should know about.

If you are no longer interested in Werner Enterprises, 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.