<!-- HTML_TAG_START -->NasdaqGS:CDW Earnings and Revenue Growth December 22nd 2024<!-- HTML_TAG_END -->
While ePlus inc. (NASDAQ:PLUS) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$102 at one point, and dropping to the lows of US$73.17. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether ePlus’ current trading price of US$76.34 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at ePlus’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for ePlus
Great news for investors – ePlus is still trading at a fairly cheap price according to our price multiple model, where we compare the company’s price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that ePlus’s ratio of 18.77x is below its peer average of 24.82x, which indicates the stock is trading at a lower price compared to the Electronic industry. However, given that ePlus’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
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. 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. ePlus’ earnings growth are expected to be in the teens in the upcoming year, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
Are you a shareholder? Since PLUS is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. With an optimistic profit 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 price multiple.
