Should You Think About Buying USANA Health Sciences, Inc. (NYSE:USNA) Now?

USANA Health Sciences, Inc. (NYSE:USNA), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$41.29 at one point, and dropping to the lows of US$34.48. 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 USANA Health Sciences' current trading price of US$37.31 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 USANA Health Sciences’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for USANA Health Sciences

What's The Opportunity In USANA Health Sciences?

Great news for investors – USANA Health Sciences is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that USANA Health Sciences’s ratio of 13.09x is below its peer average of 29.17x, which indicates the stock is trading at a lower price compared to the Personal Products industry. Another thing to keep in mind is that USANA Health Sciences’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its industry peers, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What kind of growth will USANA Health Sciences generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. However, with a negative profit growth of -7.4% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for USANA Health Sciences. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although USNA is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to USNA, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on USNA for some time, but hesitant on making the leap, we recommend you research further into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

So while earnings quality is important, it's equally important to consider the risks facing USANA Health Sciences at this point in time. Case in point: We've spotted 1 warning sign for USANA Health Sciences you should be aware of.

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

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

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.