While Applied Industrial Technologies, Inc. (NYSE:AIT) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the NYSE over the last few months. As a US$6.1b market cap stock, it seems odd Applied Industrial Technologies is not more well-covered by analysts. Although, there is more of an opportunity for mispricing in stocks with low coverage, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let's examine Applied Industrial Technologies's valuation and outlook in more detail to determine if there's still a bargain opportunity.
Check out our latest analysis for Applied Industrial Technologies
What's The Opportunity In Applied Industrial Technologies?
Great news for investors – Applied Industrial Technologies is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $222.93, but it is currently trading at US$158 on the share market, meaning that there is still an opportunity to buy now. What's more interesting is that, Applied Industrial Technologies's share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of Applied Industrial Technologies look like?
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. Applied Industrial Technologies' earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since AIT is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you've been keeping an eye on AIT for a while, now might be the time to make a leap. Its prosperous future outlook isn't fully reflected in the current share price yet, which means it's not too late to buy AIT. 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 buy.
If you want to dive deeper into Applied Industrial Technologies, you'd also look into what risks it is currently facing. At Simply Wall St, we found 1 warning sign for Applied Industrial Technologies and we think they deserve your attention.
If you are no longer interested in Applied Industrial Technologies, 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.