What Is Element Fleet Management Corp.'s (TSE:EFN) Share Price Doing?

Simply Wall St · 05/13 10:17

Element Fleet Management Corp. (TSE:EFN), might not be a large cap stock, but it maintained its current share price over the past couple of month on the TSX, with a relatively tight range of CA$21.21 to CA$23.25. However, does this price actually reflect the true value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Element Fleet Management’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Element Fleet Management

Is Element Fleet Management Still Cheap?

Great news for investors – Element Fleet Management is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is CA$34.00, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Another thing to keep in mind is that Element Fleet Management’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What kind of growth will Element Fleet Management generate?

TSX:EFN Earnings and Revenue Growth May 13th 2024

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. With profit expected to grow by 31% over the next couple of years, the future seems bright for Element Fleet Management. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? Since EFN 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 capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on EFN for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy EFN. 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.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. When we did our research, we found 2 warning signs for Element Fleet Management (1 shouldn't be ignored!) that we believe deserve your full attention.

If you are no longer interested in Element Fleet Management, you can use our free platform to see our list of over 50 other stocks with a high growth potential.