At US$83.54, Is It Time To Put Amedisys, Inc. (NASDAQ:AMED) On Your Watch List?

Amedisys, Inc. (NASDAQ:AMED), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$105 and falling to the lows of US$80.12. 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 Amedisys' current trading price of US$83.54 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 Amedisys’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 Amedisys

Is Amedisys Still Cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 13% below my intrinsic value, which means if you buy Amedisys today, you’d be paying a fair price for it. And if you believe that the stock is really worth $96.13, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, Amedisys has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Amedisys 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. With profit expected to grow by a double-digit 19% over the next couple of years, the outlook is positive for Amedisys. 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? It seems like the market has already priced in AMED’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 an eye on AMED, 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.

So while earnings quality is important, it's equally important to consider the risks facing Amedisys at this point in time. For example - Amedisys has 2 warning signs we think you should be aware of.

If you are no longer interested in Amedisys, 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.