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Today we're going to take a look at the well-established Restaurant Brands International Inc. (NYSE:QSR). The company's stock saw significant share price movement during recent months on the NYSE, rising to highs of US$61.36 and falling to the lows of US$46.94. 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 Restaurant Brands International's current trading price of US$47.97 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Restaurant Brands International’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What's the opportunity in Restaurant Brands International?
Good news, investors! Restaurant Brands International is still a bargain right now. According to my valuation, the intrinsic value for the stock is $67.09, but it is currently trading at US$47.97 on the share market, meaning that there is still an opportunity to buy now. However, given that Restaurant Brands International’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Restaurant Brands International 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. Restaurant Brands International's earnings over the next few years are expected to increase by 77%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since QSR is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. 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 QSR for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy QSR. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.
So while earnings quality is important, it's equally important to consider the risks facing Restaurant Brands International at this point in time. When we did our research, we found 3 warning signs for Restaurant Brands International (1 shouldn't be ignored!) that we believe deserve your full attention.
If you are no longer interested in Restaurant Brands International, 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.