Is It Time To Consider Buying Tactile Systems Technology, Inc. (NASDAQ:TCMD)?

Tactile Systems Technology, Inc. (NASDAQ:TCMD), is not the largest company out there, but it saw a significant share price rise of over 20% in the past couple of months on the NASDAQGM. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Tactile Systems Technology’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Tactile Systems Technology

Is Tactile Systems Technology Still Cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 10.0% below my intrinsic value, which means if you buy Tactile Systems Technology today, you’d be paying a fair price for it. And if you believe the company’s true value is $28.47, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Tactile Systems Technology’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 Tactile Systems Technology 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. Tactile Systems Technology's revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? TCMD’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 track record of its management team. Have these factors changed since the last time you looked at the stock? 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 TCMD, 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. While conducting our analysis, we found that Tactile Systems Technology has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in Tactile Systems Technology, 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.