What Is Newtek Business Services Corp's (NASDAQ:NEWT) Share Price Doing?

Newtek Business Services Corp (NASDAQ:NEWT), a capital markets company based in United States, saw significant share price volatility over the past couple of months on the NasdaqGM, rising to the highs of $18.91 and falling to the lows of $16.47. 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 Newtek Business Services's current trading price of $18.07 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 Newtek Business Services’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Newtek Business Services

What's the opportunity in Newtek Business Services?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 16.57% below my intrinsic value, which means if you buy Newtek Business Services today, you’d be paying a fair price for it. And if you believe that the stock is really worth $21.66, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Newtek Business Services’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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.

What does the future of Newtek Business Services look like?

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. 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. Newtek Business Services’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has already priced in NEWT’s positive outlook, 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 NEWT, 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 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 Newtek Business Services. You can find everything you need to know about Newtek Business Services in the latest infographic research report. If you are no longer interested in Newtek Business Services, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.