While Eagers Automotive Limited (ASX:APE) might not have the largest market cap around , it saw a decent share price growth of 13% on the ASX over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the 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? Let’s examine Eagers Automotive’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Eagers Automotive

Is Eagers Automotive Still Cheap?

Great news for investors – Eagers Automotive is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is A$17.81, but it is currently trading at AU$11.25 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Eagers Automotive’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 does the future of Eagers Automotive look like?

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. 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. However, with a relatively muted profit growth of 5.2% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Eagers Automotive, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since APE is currently undervalued, it may be a great time to increase your holdings in the stock. 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 APE for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy APE. 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.

If you want to dive deeper into Eagers Automotive, you'd also look into what risks it is currently facing. For example, Eagers Automotive has 2 warning signs (and 1 which is significant) we think you should know about.

If you are no longer interested in Eagers Automotive, 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.