Is Now The Time To Look At Buying Rush Enterprises, Inc. (NASDAQ:RUSH.B)?
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Rush Enterprises, Inc. (NASDAQ:RUSH.B), which is in the trade distributors business, and is based in United States, received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to $45.17 at one point, and dropping to the lows of $35.63. 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 Rush Enterprises's current trading price of $35.63 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Rush Enterprises’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 Rush Enterprises
What is Rush Enterprises worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 14.07% above my intrinsic value, which means if you buy Rush Enterprises today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $31.24, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Rush Enterprises’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 Rush Enterprises generate?
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. Though in the case of Rush Enterprises, it is expected to deliver a negative earnings growth of -14%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? Currently, RUSH.B appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on RUSH.B for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on RUSH.B should the price fluctuate below its true value.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Rush Enterprises. You can find everything you need to know about Rush Enterprises in the latest infographic research report. If you are no longer interested in Rush Enterprises, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
