Fortis Healthcare Limited (NSEI:FORTIS), a healthcare company based in India, received a lot of attention from a substantial price movement on the NSEI in the over the last few months, increasing to ₹165.6 at one point, and dropping to the lows of ₹114.2. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Fortis Healthcare’s current trading price of ₹123.35 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 Fortis Healthcare’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 Fortis Healthcare
What’s the opportunity in Fortis Healthcare?According to my valuation model, Fortis Healthcare seems to be fairly priced at around 20.00% below my intrinsic value, which means if you buy Fortis Healthcare today, you’d be paying a reasonable price for it. And if you believe the company’s true value is ₹154.19, then there’s not much of an upside to gain from mispricing. Furthermore, it seems like Fortis Healthcare’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will Fortis Healthcare generate?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. Fortis Healthcare’s revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? FORTIS’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 track record of its management team. 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 tabs on FORTIS, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Fortis Healthcare. You can find everything you need to know about Fortis Healthcare in the latest infographic research report. If you are no longer interested in Fortis Healthcare, you can use our free platform to see my list of over 50 other stocks with a high growth potential.