While Zurn Elkay Water Solutions Corporation (NYSE:ZWS) might not have the largest market cap around , it led the NYSE gainers with a relatively large price hike in the past couple of weeks. The recent jump in the share price has meant that the company is trading at close to its 52-week high. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today we will analyse the most recent data on Zurn Elkay Water Solutions’s outlook and valuation to see if the opportunity still exists.

Is Zurn Elkay Water Solutions Still Cheap?

According to our valuation model, Zurn Elkay Water Solutions seems to be fairly priced at around 2.80% above our intrinsic value, which means if you buy Zurn Elkay Water Solutions today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $45.52, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, Zurn Elkay Water Solutions has a low beta, which suggests its share price is less volatile than the wider market.

What does the future of Zurn Elkay Water Solutions 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 56% over the next couple of years, the future seems bright for Zurn Elkay Water Solutions. 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? ZWS’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on ZWS, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved.

If you are no longer interested in Zurn Elkay Water Solutions, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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.