While Installed Building Products, Inc. (NYSE:IBP) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$206 at one point, and dropping to the lows of US$156. 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 Installed Building Products' current trading price of US$158 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 Installed Building Products’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

We've discovered 1 warning sign about Installed Building Products. View them for free.

Is Installed Building Products Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 16% below our intrinsic value, which means if you buy Installed Building Products today, you’d be paying a fair price for it. And if you believe the company’s true value is $188.53, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Installed Building Products’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.

View our latest analysis for Installed Building Products

What does the future of Installed Building Products look like?

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. However, with a relatively muted profit growth of 8.1% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Installed Building Products, at least in the short term.

What This Means For You

Are you a shareholder? IBP’s future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on IBP, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Installed Building Products at this point in time. For example - Installed Building Products has 1 warning sign we think you should be aware of.

If you are no longer interested in Installed Building Products, 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.