Yahoo Finance Is Tempur Sealy International Inc (NYSE:TPX) Undervalued?
Tempur Sealy International Inc (NYSE:TPX), a consumer durables company based in United States, saw a significant share price rise of over 20% in the past couple of months on the NYSE. 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. However, what if the stock is still a bargain? Let’s take a look at Tempur Sealy International’s outlook and value based on the most recent financial data to see if the opportunity still exists.
View our latest analysis for Tempur Sealy International
What’s the opportunity in Tempur Sealy International?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 8.63% above my intrinsic value, which means if you buy Tempur Sealy International today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $50.99, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Tempur Sealy International’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Tempur Sealy International?
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. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Tempur Sealy International’s earnings over the next few years are expected to increase by 74.2%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in TPX’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on TPX, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Tempur Sealy International. You can find everything you need to know about Tempur Sealy International in the latest infographic research report. If you are no longer interested in Tempur Sealy International, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
