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Blackline Safety Corp. (TSE:BLN), is not the largest company out there, but it led the TSX gainers with a relatively large price hike in the past couple of weeks. The company's trading levels have reached its high for the past year, following the recent bounce in the share price. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today we will analyse the most recent data on Blackline Safety’s outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for Blackline Safety
What Is Blackline Safety Worth?
Good news, investors! Blackline Safety is still a bargain right now. According to our valuation, the intrinsic value for the stock is CA$11.16, but it is currently trading at CA$6.83 on the share market, meaning that there is still an opportunity to buy now. However, given that Blackline Safety’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Blackline Safety 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. In Blackline Safety's case, its revenues over the next couple of years are expected to double, indicating an incredibly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since BLN is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic 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 BLN for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy BLN. 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 investment decision.