Cushman & Wakefield plc (NYSE:CWK), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$21.82 at one point, and dropping to the lows of US$15.78. 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 Cushman & Wakefield’s current trading price of US$15.78 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 Cushman & Wakefield’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 Cushman & Wakefield
What is Cushman & Wakefield worth?
According to my price multiple model, which makes a comparison between the company’s price-to-earnings ratio and the industry average, the stock price seems to be justfied. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 11.38x is currently trading slightly above its industry peers’ ratio of 9.94x, which means if you buy Cushman & Wakefield today, you’d be paying a relatively sensible price for it. And if you believe that Cushman & Wakefield should be trading at this level in the long run, then there should only be a fairly immaterial downside vs other industry peers. Is there another opportunity to buy low in the future? Since Cushman & Wakefield’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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 kind of growth will Cushman & Wakefield generate?
NYSE:CWK Earnings and Revenue Growth June 11th 2022
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. Cushman & Wakefield’s earnings over the next few years are expected to increase by 92%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in CWK’s positive outlook, with shares trading around industry price multiples. 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 CWK? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?
Are you a potential investor? If you’ve been keeping tabs on CWK, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for CWK, 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.
In light of this, if you’d like to do more analysis on the company, it’s vital to be informed of the risks involved. To help with this, we’ve discovered 3 warning signs (1 doesn’t sit too well with us!) that you ought to be aware of before buying any shares in Cushman & Wakefield.
If you are no longer interested in Cushman & Wakefield, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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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.