Kindred Healthcare Inc (NYSE:KND), a healthcare company based in United States, had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of $8.85 to $9.25. However, is this the true valuation level of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Kindred Healthcare’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View out our latest analysis for Kindred Healthcare
Is Kindred Healthcare still cheap?Kindred Healthcare appears to be overvalued by 43.22% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$9.00 on the market compared to my intrinsic value of $6.28. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Since Kindred Healthcare’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.
Can we expect growth from Kindred Healthcare?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. However, with a relatively muted revenue growth of 2.70% expected in the upcoming year, short term growth doesn’t seem like a key driver for a buy decision for Kindred Healthcare.
What this means for you:
Are you a shareholder? KND’s future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe KND should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on KND for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook means it’s worth diving deeper into other factors 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 Kindred Healthcare. You can find everything you need to know about Kindred Healthcare in the latest infographic research report. If you are no longer interested in Kindred Healthcare, you can use our free platform to see my list of over 50 other stocks with a high growth potential.