Matrix Service Company (NASDAQ:MTRX) is not the largest company on the market, but it has received a lot of attention over the past few months due to a significant price movement on the NASDAQGS. The price rose to $12.08 at one point and then fell to the low of $8.77. Some price action can provide investors with a better opportunity to enter the stock and potentially buy it at a lower price. One question to answer is whether Matrix Service’s current trading price of $8.90 reflects the true value of the small-cap. Or is it currently undervalued, giving us a buying opportunity? Let’s take a look at Matrix Service’s outlook and value based on the latest financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Matrix Service
Is the Matrix service still cheap?
According to our valuation model, the stock seems fairly valued right now. It’s trading about 1.6% below our intrinsic value, which means you’d be paying a fair price for it if you buy Matrix Service today. And if you believe the company’s true value is $9.05, then there’s not much room for the stock to rise beyond its current price. Is there another opportunity to buy cheap in the future? Since Matrix Service’s share price is quite volatile, it could potentially fall (or rise) even further in the future, giving us another buying opportunity. This is based on its high beta, which is a good indicator of how much the stock moves relative to the rest of the market.
What does the future of Matrix Service look like?
Investors looking for growth for their portfolio should look at a company’s prospects before buying its shares. Buying a great company with solid prospects at a cheap price is always a good investment. So let’s also take a look at the company’s future expectations. In the coming year, Matrix Service’s earnings are expected to grow by 87%, indicating a very optimistic future. This should lead to more robust cash flows and result in a higher share value.
What this means for you
Are you a shareholder? MTRX’s optimistic future growth seems to be factored into the current share price as shares trade around their fair value. However, there are other important factors we haven’t considered today, such as the track record of the management team. Have these factors changed since you last looked at the stock? Will you have enough conviction to buy if the price fluctuates below true value?
Are you a potential investor? If you’ve been keeping an eye on MTRX, now may not be the best time to buy, with the stock trading around its fair value. However, the bullish outlook is encouraging for the company, meaning it’s worth taking a closer look at other factors such as the strength of its balance sheet in order to take advantage of the next price dip.
It can be very helpful to look at the latest analyst forecasts for Matrix Service. At Simply Wall St, we have the analyst estimates which you can view here.
If you are no longer interested in Matrix Service, you can view our list of over 50 other stocks with high growth potential on our free platform.
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This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.
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