While Pactiv Evergreen Inc. (NASDAQ:PTVE) might not have the largest market cap around , it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. The recent share price gains has brought the company back closer to its yearly peak. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock's share price. But what if there is still an opportunity to buy? Today we will analyse the most recent data on Pactiv Evergreen's outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for Pactiv Evergreen
What's The Opportunity In Pactiv Evergreen?
Great news for investors – Pactiv Evergreen is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $18.51, but it is currently trading at US$14.08 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Pactiv Evergreen'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.
Can we expect growth from Pactiv Evergreen?
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. Though in the case of Pactiv Evergreen, it is expected to deliver a negative revenue growth of -2.9% over the next couple of years, which doesn't help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What This Means For You
Are you a shareholder? Although PTVE is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. We recommend you think about whether you want to increase your portfolio exposure to PTVE, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you've been keeping an eye on PTVE for a while, but hesitant on making the leap, we recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
So while earnings quality is important, it's equally important to consider the risks facing Pactiv Evergreen at this point in time. You'd be interested to know, that we found 1 warning sign for Pactiv Evergreen and you'll want to know about this.
If you are no longer interested in Pactiv Evergreen, 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.