Yahoo Finance What Is Arch Capital Group Ltd’s (NASDAQ:ACGL) Share Price Doing?
Today we’re going to take a look at the well-established Arch Capital Group Ltd (NASDAQ:ACGL). The company’s stock received a lot of attention from a substantial price movement on the NasdaqGS over the last few months, increasing to $86.52 at one point, and dropping to the lows of $77.95. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Arch Capital Group’s current trading price of $80.72 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Arch Capital Group’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 Arch Capital Group
What is Arch Capital Group worth?
According to my valuation model, Arch Capital Group seems to be fairly priced at around 9.53% below my intrinsic value, which means if you buy Arch Capital Group today, you’d be paying a fair price for it. And if you believe the company’s true value is $89.23, then there’s not much of an upside to gain from mispricing. Furthermore, Arch Capital Group’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.
Can we expect growth from Arch Capital Group?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Arch Capital Group’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? ACGL’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 track record of its management team. 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 ACGL, 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Arch Capital Group. You can find everything you need to know about Arch Capital Group in the latest infographic research report. If you are no longer interested in Arch Capital Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
