When Should You Buy UFP Industries, Inc. (NASDAQ:UFPI)?

UFP Industries, Inc. (NASDAQ:UFPI), might not be a large cap stock, but it maintained its current share price over the past couple of month on the NASDAQGS, with a relatively tight range of US$87.77 to US$95.19. However, does this price actually reflect the true value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at UFP Industries’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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What Is UFP Industries Worth?

According to our valuation model, the stock is currently overvalued by about 34%, trading at US$92.60 compared to our intrinsic value of $69.16. This means that the opportunity to buy UFP Industries at a good price has disappeared! But, is there another opportunity to buy low in the future? Since UFP Industries’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.

Check out our latest analysis for UFP Industries

Can we expect growth from UFP Industries?

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. With profit expected to grow by 26% over the next couple of years, the future seems bright for UFP Industries. 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? It seems like the market has well and truly priced in UFPI’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe UFPI should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on UFPI for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for UFPI, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into UFP Industries, you'd also look into what risks it is currently facing. For example - UFP Industries has 1 warning sign we think you should be aware of.

If you are no longer interested in UFP Industries, 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.