Is It Time To Buy Bio-Path Holdings Inc (NASDAQ:BPTH)?

Bio-Path Holdings Inc (NASDAQ:BPTH), a pharmaceuticals company based in United States, saw significant share price volatility over the past couple of months on the NasdaqCM, rising to the highs of $3.1 and falling to the lows of $1.82. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Bio-Path Holdings's current trading price of $1.82 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 Bio-Path Holdings’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 Bio-Path Holdings

Is Bio-Path Holdings still cheap?

According to my relative valuation model, the stock seems to be currently fairly priced. In this instance, I’ve used the price-to-book (PB) ratio given that there is not enough information to reliably forecast the stock’s cash flows, and its earnings doesn’t seem to reflect its true value. I find that Bio-Path Holdings’s ratio of 2.78x is trading slightly above its industry peers’ ratio of 2.65x, which means if you buy Bio-Path Holdings today, you’d be paying a relatively fair price for it. And if you believe Bio-Path Holdings should be trading in this range, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Bio-Path Holdings’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Bio-Path Holdings?

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 an extreme expected decline in the top-line in the upcoming year, short term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Bio-Path Holdings.

What this means for you:

Are you a shareholder? BPTH seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on BPTH, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on BPTH for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on BPTH should the price fluctuate below its true value.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Bio-Path Holdings. You can find everything you need to know about Bio-Path Holdings in the latest infographic research report. If you are no longer interested in Bio-Path Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.