What is the Asbury Automotive Group, Inc. (NYSE: ABG) share price doing?
While Asbury Automotive Group, Inc. (NYSE: ABG) may not be the most well-known stock at the moment, it has received a lot of attention due to a substantial price movement on the NYSE. in recent months, falling to one point US $ 230, and falling to a low of US $ 159. Certain movements in stock prices can give investors a better opportunity to get into the stock and potentially buy at a lower price. One question to answer is whether Asbury Automotive Group’s current price of US $ 164 reflects the true value of the mid-cap? Or is it currently undervalued, giving us the opportunity to buy? Let’s take a look at the outlook and value of Asbury Automotive Group based on the most recent financial data to see if there are any catalysts for a price change.
Is Asbury Automotive Group Still Cheap?
The stock price looks reasonable at the moment based on my multiple price model, where I compare the company’s price-to-earnings ratio to the industry average. In this case, I used the price-to-earnings (PE) ratio since there isn’t enough information to reliably forecast the stock’s cash flow. I find Asbury Automotive Group’s 7.91x ratio trading slightly below the 8.67x ratio of its industry peers, which means if you buy Asbury Automotive Group today, you’ll pay a decent price for it. And if you think Asbury Automotive Group should be trading within that range, then there isn’t much room for the stock price to rise above the levels of other industry peers on the market. long term. Although there may be an opportunity to buy in the future. This is because Asbury Automotive Group’s beta (a measure of stock price volatility) is high, which means its price movements will be inflated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall more than the rest of the market, providing a prime buying opportunity.
What kind of growth will Asbury Automotive Group generate?
NYSE: ABG Profits and Revenue Growth December 25, 2021
Investors looking for growth in their portfolio may want to consider a company’s prospects before buying its shares. Buying a large business with a solid outlook for a cheap price is always a good investment, so let’s also take a look at the future expectations of the business. Asbury Automotive Group profits over the next few years are expected to increase by 40%, indicating a very optimistic future. This should lead to more robust cash flow, fueling a higher value of the stock.
What this means for you:
Are you a shareholder? ABG’s bullish future growth appears to have been factored into the current stock price, with stocks trading around industry price multiples. However, there are also other important factors that we did not consider today, such as the financial strength of the company. Have these factors changed since the last time you looked at ABG? Will you have enough conviction to buy if the price fluctuates below the industry PE ratio?
Are you a potential investor? If you’ve been keeping an eye on ABG, this might not be the best time to buy, given that it trades around industry price multiples. However, optimistic forecasts are encouraging for ABG, which means that it is worth taking a closer look at other factors such as the strength of its balance sheet, in order to profit from the next price drop.
With that in mind, we wouldn’t consider investing in a stock unless we have a thorough understanding of the risks. You would be interested to know that we have found 3 warning signs for Asbury Automotive Group and you will want to know them.
If you are no longer interested in Asbury Automotive Group, you can use our free platform to view our list of over 50 other stocks with strong 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 using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
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