Fluidigm Corporation (NASDAQ:FLDM), a life sciences company based in United States, saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $7.81 and falling to the lows of $5.46. 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 Fluidigm’s current trading price of $5.79 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 Fluidigm’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 Fluidigm
What is Fluidigm worth?The stock seems fairly valued at the moment according to my relative valuation model. I’ve used the price-to-book ratio in this instance because there’s not enough visibility to forecast its cash flows, and its earnings doesn’t seem to reflect its true value. The stock’s ratio of 4.64x is currently trading slightly above its industry peers’ ratio of 3.24x, which means if you buy Fluidigm today, you’d be paying a relatively fair price for it. And if you believe that Fluidigm should be trading at this level in the long run, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Fluidigm’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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.
What does the future of Fluidigm look like?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. Fluidigm’s earnings over the next few years are expected to increase by 26.01%, indicating a highly optimistic future ahead. This should lead to more robust 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 FLDM’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 FLDM? 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 FLDM, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for FLDM, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, 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 Fluidigm. You can find everything you need to know about Fluidigm in the latest infographic research report. If you are no longer interested in Fluidigm, you can use our free platform to see my list of over 50 other stocks with a high growth potential.