Robert Half Inc. (NYSE:RHI) may not be a large-cap stock, but it has attracted a lot of attention due to a significant price movement on the NYSE over the past few months. The price rose to $71.48 at one point and then fell to the low of $59.34. Some price action can provide investors with a better opportunity to enter the stock and potentially buy it at a lower price. One question to answer is whether Robert Half’s current trading price of $60.99 reflects the true value of the mid-cap stock. Or is it currently undervalued, giving us a buying opportunity? Let’s take a look at Robert Half’s outlook and value based on the latest financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Robert Half
What opportunities does Robert Half offer?
Great news for investors – Robert Half is still trading at a relatively cheap price according to our price multiple model, where we compare the company’s price-to-earnings ratio to the industry average. In this case, we used the price-to-earnings (P/E) ratio because there is not enough information to reliably forecast the stock’s cash flows. We note that Robert Half’s ratio of 19.83x is below its peers’ average of 26.73x, suggesting that the stock is trading at a lower price compared to the professional services industry. However, since Robert Half’s stock is relatively volatile (i.e., its price fluctuations are more pronounced compared to the rest of the market), this could mean that the price can fall even further, giving us another buying opportunity in the future. This is based on its high beta, which is a good indicator of share price volatility.
What kind of growth will Robert Half generate?
Future prospects are an important consideration when looking to buy a stock, especially if you’re an investor looking for growth in their portfolio. Although value investors would argue that intrinsic value relative to price is most important, high growth potential at a cheap price would be a more compelling investment thesis. Robert Half’s earnings growth is expected to be in the double digits in the coming years, suggesting a solid future. This should translate into robust cash flows and lead to higher share value.
What this means for you
Are you a shareholder? With RHI currently trading below the industry P/E, it could be a good time to add to your holdings. Given the positive earnings outlook, this growth does not seem to be fully reflected in the share price yet. However, there are other factors to consider, such as the capital structure, which could explain the current price multiple.
Are you a potential investor? If you have been keeping an eye on RHI for some time, now could be the right time to buy. The strong future earnings prospects are not yet fully reflected in the current share price, so it is not too late to buy RHI. However, before making an investment decision, you should consider other factors such as the track record of the management team to make an informed assessment.
So if you want to conduct further analysis on the company, it is important to be aware of the risks involved. Robert Half, for example, has 1 warning sign In our opinion, you should be aware of this.
If you are no longer interested in Robert Half, you can view our list of over 50 other stocks with high growth potential on our free platform.
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This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.
