Is Trimble Inc. (NASDAQ:TRMB) Potentially Undervalued?

Trimble Inc. (NASDAQ:TRMB) received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$74.61 at one point, and dropping to the lows of US$61.53. 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 Trimble's current trading price of US$61.53 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 Trimble’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 Trimble

What's the opportunity in Trimble?

Great news for investors – Trimble is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $97.23, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Trimble’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 kind of growth will Trimble generate?

earnings-and-revenue-growth

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 4.1% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Trimble, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since TRMB is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. 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 TRMB for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy TRMB. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Every company has risks, and we've spotted 1 warning sign for Trimble you should know about.

If you are no longer interested in Trimble, 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.