Is Now The Time To Look At Buying Cardiovascular Systems, Inc. (NASDAQ:CSII)?

Cardiovascular Systems, Inc. (NASDAQ:CSII), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$42.29 at one point, and dropping to the lows of US$34.41. 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 Cardiovascular Systems' current trading price of US$37.55 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 Cardiovascular Systems’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Cardiovascular Systems

What is Cardiovascular Systems worth?

Good news, investors! Cardiovascular Systems is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $61.48, but it is currently trading at US$37.55 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Cardiovascular Systems’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What kind of growth will Cardiovascular Systems 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 70% over the next year, the near-term future seems bright for Cardiovascular Systems. 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? Since CSII 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 financial health to consider, which could explain the current undervaluation.

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

So while earnings quality is important, it's equally important to consider the risks facing Cardiovascular Systems at this point in time. You'd be interested to know, that we found 1 warning sign for Cardiovascular Systems and you'll want to know about this.

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This article by Simply Wall St is general in nature. 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.
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