Is It Time To Consider Buying Addus HomeCare Corporation (NASDAQ:ADUS)?

Addus HomeCare Corporation (NASDAQ:ADUS), is not the largest company out there, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$114 and falling to the lows of US$81.74. 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 Addus HomeCare's current trading price of US$81.74 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 Addus HomeCare’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 Addus HomeCare

Is Addus HomeCare Still Cheap?

According to my valuation model, Addus HomeCare seems to be fairly priced at around 18% below my intrinsic value, which means if you buy Addus HomeCare today, you’d be paying a fair price for it. And if you believe that the stock is really worth $99.15, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Addus HomeCare’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Addus HomeCare?

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. With profit expected to grow by 63% over the next couple of years, the future seems bright for Addus HomeCare. 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? ADUS’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 an eye on ADUS, now may not be the most advantageous 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.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Every company has risks, and we've spotted 1 warning sign for Addus HomeCare you should know about.

If you are no longer interested in Addus HomeCare, 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.