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Today we're going to take a look at the well-established RPM International Inc. (NYSE:RPM). The company's stock saw a decent share price growth of 12% on the NYSE over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine RPM International’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
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What's The Opportunity In RPM International?
Great news for investors – RPM International is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $149.77, but it is currently trading at US$109 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 RPM International’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.
See our latest analysis for RPM International
What does the future of RPM International look like?
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. RPM International's earnings over the next few years are expected to increase by 24%, 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 RPM is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive 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 RPM for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy RPM. 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 buy.
