What Is NeoPharm CO., LTD.'s (KOSDAQ:092730) Share Price Doing?

While NeoPharm CO., LTD. (KOSDAQ:092730) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the KOSDAQ over the last few months. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at NeoPharm’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for NeoPharm

What is NeoPharm worth?

According to my valuation model, NeoPharm seems to be fairly priced at around 19% below my intrinsic value, which means if you buy NeoPharm today, you’d be paying a fair price for it. And if you believe that the stock is really worth ₩40179.95, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that NeoPharm’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will NeoPharm generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. NeoPharm's earnings over the next few years are expected to increase by 21%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? A092730’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 tabs on A092730, 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.

If you'd like to know more about NeoPharm as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 1 warning sign for NeoPharm you should know about.

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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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