Yahoo Finance At US$34.76, Is It Time To Put Marcus & Millichap, Inc. (NYSE:MMI) On Your Watch List?
Marcus & Millichap, Inc. (NYSE:MMI), is not the largest company out there, but it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$38.67 at one point, and dropping to the lows of US$31.74. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Marcus & Millichap's current trading price of US$34.76 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Marcus & Millichap’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Marcus & Millichap
Is Marcus & Millichap Still Cheap?
According to my valuation model, Marcus & Millichap seems to be fairly priced at around 17% below my intrinsic value, which means if you buy Marcus & Millichap today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $41.67, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that Marcus & Millichap’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.
What kind of growth will Marcus & Millichap generate?
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 -7.9% expected next year, near-term growth certainly doesn’t appear to be a driver for a buy decision for Marcus & Millichap. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Currently, MMI appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on MMI for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on MMI should the price fluctuate below its true value.
Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. So feel free to check out our free graph representing analyst forecasts.
If you are no longer interested in Marcus & Millichap, 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.
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