The Interpublic Group of Companies, Inc. (NYSE:IPG) received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$30.70 at one point, and dropping to the lows of US$25.32. 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 Interpublic Group of Companies' current trading price of US$25.60 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 Interpublic Group of Companies'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 Interpublic Group of Companies

What's The Opportunity In Interpublic Group of Companies?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. I've used the price-to-earnings ratio in this instance because there's not enough visibility to forecast its cash flows. The stock's ratio of 10.14x is currently trading in-line with its industry peers' ratio, which means if you buy Interpublic Group of Companies today, you'd be paying a relatively reasonable price for it. Although, there may be an opportunity to buy in the future. This is because Interpublic Group of Companies's beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Interpublic Group of Companies 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. However, with a relatively muted profit growth of 9.9% expected over the next couple of years, growth doesn't seem like a key driver for a buy decision for Interpublic Group of Companies, at least in the short term.

What This Means For You

Are you a shareholder? IPG's future growth appears to have been factored into the current share price, with shares trading around industry price multiples. 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 IPG? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you've been keeping tabs on IPG, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive growth outlook may mean it's worth diving deeper into other factors in order to take advantage of the next price drop.

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. In terms of investment risks, we've identified 1 warning sign with Interpublic Group of Companies, and understanding it should be part of your investment process.

If you are no longer interested in Interpublic Group of Companies, 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.