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Qube Holdings Limited (ASX:QUB), might not be a large cap stock, but it saw a decent share price growth in the teens level on the ASX over the last few months. 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 I will analyse the most recent data on Qube Holdings’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for Qube Holdings
What is Qube Holdings worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 14.29% above my intrinsic value, which means if you buy Qube Holdings today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is A$2.70, there’s only an insignificant downside when the price falls to its real value. Furthermore, Qube Holdings’s low beta implies that the stock is less volatile than the wider market.
What kind of growth will Qube Holdings 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. With revenues expected to grow by a double-digit 28% over the next couple of years, the outlook is positive for Qube Holdings. If the level of expenses is able to be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has already priced in QUB’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 confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on QUB, 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.
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.