While The Goodyear Tire & Rubber Company (NASDAQ:GT) might not have the largest market cap around , it received a lot of attention from a substantial price increase on the NASDAQGS over the last few months. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. 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 Goodyear Tire & Rubber’s outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for Goodyear Tire & Rubber
Great news for investors – Goodyear Tire & Rubber is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $12.89, but it is currently trading at US$10.13 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 Goodyear Tire & Rubber’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.
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. However, with a relatively muted revenue growth of 1.1% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Goodyear Tire & Rubber, at least in the short term.
Are you a shareholder? Even though growth is relatively muted, since GT is currently undervalued, it may be a great time to increase your holdings in the stock. 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 GT for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy GT. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.
With this in mind, we wouldn’t consider investing in a stock unless we had a thorough understanding of the risks. Case in point: We’ve spotted 1 warning sign for Goodyear Tire & Rubber you should be aware of.
If you are no longer interested in Goodyear Tire & Rubber, 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.