CloudMD Software & Services Inc. (CVE:DOC), is not the largest company out there, but it received a lot of attention from a substantial price movement on the TSXV over the last few months, increasing to CA$3.14 at one point, and dropping to the lows of CA$1.76. 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 CloudMD Software & Services' current trading price of CA$1.88 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at CloudMD Software & Services’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is CloudMD Software & Services still cheap?
Great news for investors – CloudMD Software & Services is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is CA$2.53, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, CloudMD Software & Services’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 CloudMD Software & Services?
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. With profit expected to grow by 97% over the next couple of years, the future seems bright for CloudMD Software & Services. 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 DOC is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive 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 DOC for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy DOC. 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 buy.
If you want to dive deeper into CloudMD Software & Services, you'd also look into what risks it is currently facing. Case in point: We've spotted 4 warning signs for CloudMD Software & Services you should be mindful of and 1 of these is potentially serious.
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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. 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.
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