When Should You Buy PerkinElmer, Inc. (NYSE:PKI)?

PerkinElmer, Inc. (NYSE:PKI) received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$185 at one point, and dropping to the lows of US$142. 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 PerkinElmer's current trading price of US$152 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at PerkinElmer’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 PerkinElmer

Is PerkinElmer still cheap?

According to my valuation model, PerkinElmer seems to be fairly priced at around 6.81% above my intrinsic value, which means if you buy PerkinElmer today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $142.37, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because PerkinElmer’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of PerkinElmer 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. Though in the case of PerkinElmer, it is expected to deliver a negative earnings growth of -7.7%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What this means for you:

Are you a shareholder? Currently, PKI appears to be trading around its fair value, 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 beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on PKI for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears 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 PKI should the price fluctuate below its true value.

If you want to dive deeper into PerkinElmer, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 3 warning signs for PerkinElmer you should know about.

If you are no longer interested in PerkinElmer, 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.