TD Ameritrade Holding Corporation (NASDAQ:AMTD) saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$52.45 and falling to the lows of US$32.85. 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 TD Ameritrade Holding's current trading price of US$33.77 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 TD Ameritrade Holding’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is TD Ameritrade Holding worth?
Great news for investors – TD Ameritrade Holding is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $58.77, but it is currently trading at US$33.77 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, TD Ameritrade Holding’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from TD Ameritrade Holding?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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 negative profit growth of -8.2% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for TD Ameritrade Holding. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Although AMTD is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to AMTD, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on AMTD for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on TD Ameritrade Holding. You can find everything you need to know about TD Ameritrade Holding in the latest infographic research report. If you are no longer interested in TD Ameritrade Holding, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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If you spot an error that warrants correction, please contact the editor at email@example.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.