Is Now An Opportune Moment To Examine Essential Utilities, Inc. (NYSE:WTRG)?

Essential Utilities, Inc. (NYSE:WTRG) saw its share price hover around a small range of US$37.98 to US$41.49 over the last few weeks. But is this actually reflective of the share value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Essential Utilities’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 Essential Utilities

What Is Essential Utilities Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 9.7% below our intrinsic value, which means if you buy Essential Utilities today, you’d be paying a fair price for it. And if you believe the company’s true value is $42.89, then there’s not much of an upside to gain from mispricing. What's more, Essential Utilities’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Essential Utilities?

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. Essential Utilities' earnings over the next few years are expected to increase by 22%, 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? WTRG’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 WTRG, 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.

So while earnings quality is important, it's equally important to consider the risks facing Essential Utilities at this point in time. Our analysis shows 4 warning signs for Essential Utilities (1 makes us a bit uncomfortable!) and we strongly recommend you look at them before investing.

If you are no longer interested in Essential Utilities, 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.