Federal Signal Corporation (NYSE:FSS), is not the largest company out there, but it saw significant share price movement during recent months on the NYSE, rising to highs of US$99.97 and falling to the lows of US$82.35. 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 Federal Signal's current trading price of US$89.47 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Federal Signal’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 Federal Signal

What's The Opportunity In Federal Signal?

Good news, investors! Federal Signal is still a bargain right now. According to our valuation, the intrinsic value for the stock is $129.13, but it is currently trading at US$89.47 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Federal Signal’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What does the future of Federal Signal look like?

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 20% over the next couple of years, the future seems bright for Federal Signal. 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? Since FSS is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic 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 FSS for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy FSS. 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 investment decision.