While Willdan Group, Inc. (NASDAQ:WLDN) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the NASDAQGM over the last few months, increasing to US$47.70 at one point, and dropping to the lows of US$35.45. 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 Willdan Group's current trading price of US$36.40 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Willdan Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Willdan Group

What Is Willdan Group Worth?

According to our 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. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that Willdan Group’s ratio of 22.44x is trading slightly below its industry peers’ ratio of 24.84x, which means if you buy Willdan Group today, you’d be paying a decent price for it. And if you believe Willdan Group should be trading in this range, then there isn’t much room for the share price to grow beyond the levels of other industry peers over the long-term. So, is there another chance to buy low in the future? Given that Willdan Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Willdan Group?

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. 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. However, with a relatively muted profit growth of 0.6% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Willdan Group, at least in the short term.

What This Means For You

Are you a shareholder? WLDN’s future growth appears to have been factored into the current share price, 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 WLDN? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you’ve been keeping tabs on WLDN, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the positive growth outlook may mean 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 Willdan Group, you'd also look into what risks it is currently facing. At Simply Wall St, we found 1 warning sign for Willdan Group and we think they deserve your attention.

If you are no longer interested in Willdan Group, 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.