Yahoo Finance Is Caesarstone Ltd (NASDAQ:CSTE) Undervalued?
Caesarstone Ltd (NASDAQ:CSTE), a building company based in Israel, received a lot of attention from a substantial price increase on the NasdaqGS over the last few months. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on Caesarstone’s outlook and valuation to see if the opportunity still exists. See our latest analysis for Caesarstone
Is Caesarstone still cheap?
Good news, investors! Caesarstone is still a bargain right now. According to my valuation, the intrinsic value for the stock is $25.6, but it is currently trading at US$17.30 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Caesarstone’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 kind of growth will Caesarstone 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. With profit expected to grow by 94.54% over the next year, the near-term future seems bright for Caesarstone. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since CSTE is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive 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 capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on CSTE for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CSTE. 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Caesarstone. You can find everything you need to know about Caesarstone in the latest infographic research report. If you are no longer interested in Caesarstone, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
