Is Now The Time To Look At Buying Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC)?

Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the NASDAQGM over the last few months. 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? Today I will analyse the most recent data on Tabula Rasa HealthCare’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Tabula Rasa HealthCare

Is Tabula Rasa HealthCare still cheap?

Good news, investors! Tabula Rasa HealthCare is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $90.05, but it is currently trading at US$55.01 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Tabula Rasa HealthCare’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 Tabula Rasa HealthCare 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. Tabula Rasa HealthCare's earnings over the next few years are expected to increase by 23%, 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 TRHC 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 TRHC for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy TRHC. 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 buy.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. You'd be interested to know, that we found 4 warning signs for Tabula Rasa HealthCare and you'll want to know about these.

If you are no longer interested in Tabula Rasa HealthCare, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

When trading Tabula Rasa HealthCare or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.