When Should You Buy 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$134 and falling to the lows of US$118. 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$126 reflective of the actual value of the mid-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.

Check out our latest analysis for Addus HomeCare

What Is Addus HomeCare Worth?

Great news for investors – Addus HomeCare is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $163.32, but it is currently trading at US$126 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Addus HomeCare’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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 kind of growth will Addus HomeCare 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. Addus HomeCare's earnings over the next few years are expected to increase by 51%, 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? Since ADUS is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on ADUS for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ADUS. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. You'd be interested to know, that we found 2 warning signs for Addus HomeCare and you'll want to know about them.

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.