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Why Valvoline Inc. (NYSE:VVV) Could Be Worth Watching

Simply Wall St

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Valvoline Inc. ( NYSE:VVV ), which is in the chemicals business, and is based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. With many analysts covering the mid-cap 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 take a look at Valvoline’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Valvoline

What is Valvoline worth?

According to my valuation model, Valvoline seems to be fairly priced at around 1.73% above my intrinsic value, which means if you buy Valvoline today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $18.85, there’s only an insignificant downside when the price falls to its real value. In addition to this, Valvoline has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from Valvoline?

NYSE:VVV Past and Future Earnings, June 18th 2019

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to grow by 24% over the next couple of years, the future seems bright for Valvoline. 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 already priced in VVV’s positive outlook, 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 confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on VVV, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which 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.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Valvoline. You can find everything you need to know about Valvoline in the latest infographic research report . If you are no longer interested in Valvoline, you can use our free platform to see my list of over 50 other stocks with a high growth potential .

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.