While Werner Enterprises, Inc. (NASDAQ:WERN) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$42.24 at one point, and dropping to the lows of US$34.20. 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$36.26 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.
Is Werner Enterprises Still Cheap?
Werner Enterprises appears to be overvalued by 25% at the moment, based on our discounted cash flow valuation. The stock is currently priced at US$36.26 on the market compared to our intrinsic value of $29.04. This means that the opportunity to buy Werner Enterprises at a good price has disappeared! Furthermore, Werner Enterprises's share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it's there, it may be hard to fall back down into an attractive buying range.
Can we expect growth from Werner Enterprises?
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. With profit expected to grow by 83% over the next couple of years, the future seems bright for Werner Enterprises. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? WERN's optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe WERN 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. 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 tabs on WERN for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there's no upside from mispricing. However, the positive outlook is encouraging for WERN, which means it's worth diving deeper into other factors in order to take advantage of the next price drop.
If you'd like to know more about Werner Enterprises as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Werner Enterprises has 3 warning signs and it would be unwise to ignore them.
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.