Why Phreesia, Inc. (NYSE:PHR) Could Be Worth Watching

Phreesia, Inc. (NYSE:PHR), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Today we will analyse the most recent data on Phreesia’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Phreesia

Is Phreesia Still Cheap?

The stock is currently trading at US$24.22 on the share market, which means it is overvalued by 35% compared to our intrinsic value of $17.99. This means that the opportunity to buy Phreesia at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Phreesia’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Phreesia 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. 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. With profit expected to grow by 65% over the next year, the near-term future seems bright for Phreesia. 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? PHR’s optimistic 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 PHR 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 an eye on PHR for a while, 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 optimistic prospect is encouraging for PHR, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Phreesia, you'd also look into what risks it is currently facing. At Simply Wall St, we found 1 warning sign for Phreesia and we think they deserve your attention.

If you are no longer interested in Phreesia, 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.