OraSure Technologies, Inc. (NASDAQ:OSUR): Can Growth Justify Its August Share Price?

Looking at OraSure Technologies, Inc.’s (NASDAQ:OSUR) fundamentals some investors are wondering if its last closing price of $8.25 represents a good value for money for this high growth stock. Let’s take a look at some key metrics to determine whether there’s any value here for current and potential future investors.

Check out our latest analysis for OraSure Technologies

What can we expect from OraSure Technologies in the future?

OraSure Technologies’s extremely high growth potential in the near future is attracting investors. Expectations from 3 analysts are extremely positive with earnings per share estimated to surge from current levels of $0.314 to $0.376 over the next three years. On average, this leads to a growth rate of 18% each year, which illustrates a highly optimistic outlook in the near term.

Is OSUR’s share price justified by its earnings growth?

OSUR is available at a PE (price-to-earnings) ratio of 26.25x today, which tells us the stock is undervalued based on its latest annual earnings update compared to the Medical Equipment average of 42.46x , and overvalued compared to the US market average ratio of 17.55x .

NasdaqGS:OSUR Price Estimation Relative to Market, August 4th 2019
NasdaqGS:OSUR Price Estimation Relative to Market, August 4th 2019

Given that OSUR’s price-to-earnings of 26.25x lies below the industry average, this already indicates that the company could be potentially undervalued. However, seeing as OraSure Technologies is perceived as a high-growth stock, we must also account for its earnings growth, which is captured in the PEG ratio. A PE ratio of 26.25x and expected year-on-year earnings growth of 18% give OraSure Technologies a higher PEG ratio of 1.48x. Based on this growth, OraSure Technologies’s stock can be considered slightly overvalued , based on the fundamentals.

What this means for you:

OSUR’s current overvaluation could signal a potential selling opportunity to reduce your exposure to the stock, or it you’re a potential investor, now may not be the right time to buy. However, basing your investment decision off one metric alone is certainly not sufficient. There are many things I have not taken into account in this article and the PEG ratio is very one-dimensional. If you have not done so already, I highly recommend you to complete your research by taking a look at the following:

  1. Financial Health: Are OSUR’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  2. Past Track Record: Has OSUR been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of OSUR’s historicals for more clarity.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.