HTG Molecular Diagnostics Inc (NASDAQ:HTGM), a healthcare services company based in United States, led the NasdaqCM gainers with a relatively large price hike in the past couple of weeks. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine HTG Molecular Diagnostics’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. See our latest analysis for HTG Molecular Diagnostics
What’s the opportunity in HTG Molecular Diagnostics?The stock seems fairly valued at the moment according to my relative valuation model. I’ve used the price-to-book ratio in this instance because there’s not enough visibility to forecast its cash flows, and its earnings doesn’t seem to reflect its true value. The stock’s ratio of 3.78x is currently trading slightly above its industry peers’ ratio of 3.44x, which means if you buy HTG Molecular Diagnostics today, you’d be paying a relatively reasonable price for it. And if you believe that HTG Molecular Diagnostics should be trading at this level in the long run, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since HTG Molecular Diagnostics’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 kind of growth will HTG Molecular Diagnostics generate?Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. HTG Molecular Diagnostics’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 HTGM’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 track record of its management team. Have these factors changed since the last time you looked at HTGM? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on HTGM, 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 HTGM, 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on HTG Molecular Diagnostics. You can find everything you need to know about HTG Molecular Diagnostics in the latest infographic research report. If you are no longer interested in HTG Molecular Diagnostics, you can use our free platform to see my list of over 50 other stocks with a high growth potential.