Is it too late to consider buying Luxfer Holdings PLC (NYSE:LXFR)?

Luxfer Holdings PLC (NYSE: LXFR) isn’t the biggest company in the market, but it has received a lot of attention due to a substantial price increase on the New York Stock Exchange over the past few months. 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 closer look at Luxfer Holdings’ valuation and outlook to determine if there’s still a bargain opportunity.

View our latest analysis for Luxfer Holdings

What is the opportunity at Luxfer Holdings?

The stock currently seems fairly valued according to my valuation model. It’s trading about 13% below my intrinsic value, which means if you buy Luxfer Holdings today, you’ll be paying a reasonable price for it. And if you think the company’s true value is $20.23, then there isn’t much room for the stock price to rise beyond what it’s currently trading at. Additionally, the Luxfer Holdings stock price could be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Luxfer Holdings?

Investors looking for growth in their portfolio may want to consider a company’s prospects before buying its shares. 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. Luxfer Holdings’ earnings growth is expected to be around 10% over the coming year, suggesting a strong future. This should lead to robust cash flows, fueling a higher stock value.

What this means for you

Are you a shareholder? LXFR’s optimistic future growth appears to have been factored into the current share price, with shares trading around their fair value. However, there are also other important factors that we haven’t considered today, such as the background of its management team. Have these factors changed since you last looked at the stock? Will you have enough confidence to invest in the company if the price falls below its fair value?

Are you a potential investor? If you’ve been keeping an eye on LXFR, now may not be the most advantageous time to buy, given that it’s trading around its fair value. However, the optimistic outlook is encouraging for the company, meaning it’s worth taking a closer look at other factors, like the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it’s equally important to consider the risks that Luxfer Holdings faces right now. For example – Luxfer Holdings has 1 warning sign we think you should be aware of this.

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

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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.

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