Australia markets closed
  • ALL ORDS

    7,562.40
    -37.50 (-0.49%)
     
  • AUD/USD

    0.7139
    +0.0011 (+0.15%)
     
  • ASX 200

    7,239.70
    -39.60 (-0.54%)
     
  • OIL

    71.26
    +3.11 (+4.56%)
     
  • GOLD

    1,796.80
    +8.70 (+0.49%)
     
  • BTC-AUD

    80,574.21
    +3,828.60 (+4.99%)
     
  • CMC Crypto 200

    1,436.84
    -18.57 (-1.28%)
     

At US$24.60, Is Tri Pointe Homes, Inc. (NYSE:TPH) Worth Looking At Closely?

  • Oops!
    Something went wrong.
    Please try again later.
·3-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Tri Pointe Homes, Inc. (NYSE:TPH), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the NYSE over the last few months. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Tri Pointe Homes’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Tri Pointe Homes

Is Tri Pointe Homes still cheap?

Great news for investors – Tri Pointe Homes is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $32.58, but it is currently trading at US$24.60 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Tri Pointe Homes’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Tri Pointe Homes look like?

earnings-and-revenue-growth
earnings-and-revenue-growth

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to grow by 20% over the next couple of years, the future seems bright for Tri Pointe Homes. 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? Since TPH is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive 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 financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on TPH for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy TPH. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

So while earnings quality is important, it's equally important to consider the risks facing Tri Pointe Homes at this point in time. Case in point: We've spotted 2 warning signs for Tri Pointe Homes you should be aware of.

If you are no longer interested in Tri Pointe Homes, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an 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 account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting