What Does Westinghouse Air Brake Technologies Corporation's (NYSE:WAB) Share Price Indicate?

Simply Wall St · 10/16 10:07

Westinghouse Air Brake Technologies Corporation (NYSE:WAB) received a lot of attention from a substantial price increase on the NYSE over the last few months. The company's trading levels have reached its high for the past year, following the recent bounce in the share price. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine Westinghouse Air Brake Technologies’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Westinghouse Air Brake Technologies

What Is Westinghouse Air Brake Technologies Worth?

According to our valuation model, Westinghouse Air Brake Technologies seems to be fairly priced at around 6.2% below our intrinsic value, which means if you buy Westinghouse Air Brake Technologies today, you’d be paying a fair price for it. And if you believe the company’s true value is $199.63, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Westinghouse Air Brake Technologies’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.

What kind of growth will Westinghouse Air Brake Technologies generate?

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NYSE:WAB Earnings and Revenue Growth October 16th 2024

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. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 46% over the next couple of years, the future seems bright for Westinghouse Air Brake Technologies. 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? WAB’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on WAB, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as 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 facing Westinghouse Air Brake Technologies at this point in time. You'd be interested to know, that we found 1 warning sign for Westinghouse Air Brake Technologies and you'll want to know about it.

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