In This Article:
While Tennant Company (NYSE:TNC) might not have the largest market cap around , it saw significant share price movement during recent months on the NYSE, rising to highs of US$89.16 and falling to the lows of US$68.18. 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 Tennant's current trading price of US$72.16 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 Tennant’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What's The Opportunity In Tennant?
Great news for investors – Tennant is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $112.66, but it is currently trading at US$72.16 on the share market, meaning that there is still an opportunity to buy now. Tennant’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
View our latest analysis for Tennant
Can we expect growth from Tennant?
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. Tennant's earnings over the next few years are expected to increase by 35%, 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? Since TNC is currently undervalued, it may be a great time to increase 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 financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on TNC for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy TNC. 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.