Is it too late to consider buying AZZ Inc. (NYSE: AZZ)?

AZZ Inc. (NYSE: AZZ) isn’t the biggest company in the market, but it has led the NYSE gainers with a relatively large price rally over the past two weeks. As a small-cap stock, with virtually no analyst coverage, there is generally more opportunity for mispricing because there is less activity to bring the stock closer to its fair value. Is there still a buying opportunity here? Let’s take a look at AZZ’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for AZZ

What is AZZ worth?

Great news for investors: AZZ is still trading at a pretty cheap price. My valuation model shows that the intrinsic value of the stock is $62.28, but it is currently trading at US$43.42 on the stock market, meaning there is still a buying opportunity now . What’s more interesting is that the AZZ stock price is quite volatile, which gives us more chances to buy since the stock price could go down (or up) in the future. This is based on its high beta, which is a good indicator of how the stock is doing relative to the rest of the market.

What does the future of AZZ look like?

Future outlook is an important aspect when considering buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors argue that it’s the intrinsic value relative to the price that matters most, a more compelling investment thesis would be high growth potential at a cheap price. Over the coming year, AZZ’s profits are expected to grow by 42%, which suggests a very optimistic future. This should lead to more robust cash flows, translating into a higher stock market value.

What this means for you

Are you a shareholder? Given that AZZ is currently undervalued, now may be a great time to increase your stock holdings. With a positive outlook on the horizon, it appears this growth has yet to be fully factored into the stock price. However, other factors should also be considered, such as capital structure, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on AZZ for a while, now might be the time to get into the stock. Its optimistic future outlook is not yet fully reflected in the current stock price, meaning it’s not too late to buy AZZ. But before making an investment decision, consider other factors such as the track record of its management team, in order to make an informed investment decision.

Keep in mind that when it comes to analyzing a stock, it is worth noting the risks involved. Our analysis shows 2 warning signs for AZZ (1 is significant!) and we highly recommend reviewing them before investing.

If AZZ no longer interests you, you can use our free platform to consult our list of more than 50 other stocks with high growth potential.

Any feedback on this article? Worried about the content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to constitute financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your objectives or your financial situation. Our goal is to provide you with targeted, long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Join a paid user research session
You will receive a $30 USD Amazon Gift Card for 1 hour of your time while helping us create better investing tools for individual investors like you. register here