Harvard Bioscience, Inc. (NASDAQ:HBIO), which is in the life sciences business, and is based in United States, led the NASDAQGM gainers with a relatively large price hike in the past couple of weeks. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine Harvard Bioscience’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
What is Harvard Bioscience worth?
Great news for investors – Harvard Bioscience is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $4.45, but it is currently trading at US$2.48 on the share market, meaning that there is still an opportunity to buy now. However, given that Harvard Bioscience’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.
Can we expect growth from Harvard Bioscience?
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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Harvard Bioscience, at least in the near future.
What this means for you:
Are you a shareholder? Although HBIO is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to HBIO, 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 HBIO for some time, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Harvard Bioscience. You can find everything you need to know about Harvard Bioscience in the latest infographic research report. If you are no longer interested in Harvard Bioscience, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.