When Should You Buy Lincoln Educational Services Corporation (NASDAQ:LINC)?

While Lincoln Educational Services Corporation (NASDAQ:LINC) might not have the largest market cap around , it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Lincoln Educational Services’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Lincoln Educational Services

What's The Opportunity In Lincoln Educational Services?

According to our valuation model, Lincoln Educational Services seems to be fairly priced at around 2.67% above our intrinsic value, which means if you buy Lincoln Educational Services today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $12.38, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Lincoln Educational Services’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of Lincoln Educational Services 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. However, with an extremely negative double-digit change in profit expected next year, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Lincoln Educational Services, at least in the near future.

What This Means For You

Are you a shareholder? Currently, LINC appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on LINC for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on LINC should the price fluctuate below its true value.

If you want to dive deeper into Lincoln Educational Services, you'd also look into what risks it is currently facing. For example, we've found that Lincoln Educational Services has 3 warning signs (2 make us uncomfortable!) that deserve your attention before going any further with your analysis.

If you are no longer interested in Lincoln Educational Services, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com