What Is The Beauty Health Company's (NASDAQ:SKIN) Share Price Doing?

The Beauty Health Company (NASDAQ:SKIN), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQCM, rising to highs of US$13.40 and falling to the lows of US$8.39. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Beauty Health's current trading price of US$9.10 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Beauty Health’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Beauty Health

Is Beauty Health Still Cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 12.55% above my intrinsic value, which means if you buy Beauty Health today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $8.08, there’s only an insignificant downside when the price falls to its real value. Furthermore, Beauty Health’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will Beauty Health 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. Beauty Health's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger 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 SKIN’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 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 an eye on SKIN, now may not be the most optimal 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.

Diving deeper into the forecasts for Beauty Health mentioned earlier will help you understand how analysts view the stock going forward. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Beauty Health, 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.