nVent Electric plc (NYSE:NVT), is not the largest company out there, but it saw a decent share price growth in the teens level on the NYSE over the last few months. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company's outlook is already priced into the stock. But what if there is still an opportunity to buy? Let's take a look at nVent Electric's outlook and value based on the most recent financial data to see if the opportunity still exists.
View our latest analysis for nVent Electric
What Is nVent Electric Worth?
According to my valuation model, the stock is currently overvalued by about 24%, trading at US$53.98 compared to my intrinsic value of $43.39. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Given that nVent Electric's share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from nVent Electric?
Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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 negative profit growth of -0.3% expected over the next couple of years, near-term growth certainly doesn't appear to be a driver for a buy decision for nVent Electric. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? If you believe NVT 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. Given the risk from a negative growth outlook, this could be the right time to reduce your total portfolio risk. 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 an eye on NVT for a while, now may not be the best time to enter into the stock. The company's price has climbed passed its true value, in addition to a risky future outlook. However, there are also other important factors which we haven't considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?
If you'd like to know more about nVent Electric as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that nVent Electric has 1 warning sign and it would be unwise to ignore it.
If you are no longer interested in nVent Electric, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.