Stock Analysis

Is Now The Time To Look At Buying Everspin Technologies, Inc. (NASDAQ:MRAM)?

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NasdaqGM:MRAM
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Everspin Technologies, Inc. (NASDAQ:MRAM), is not the largest company out there, but it led the NASDAQGM gainers with a relatively large price hike in the past couple of weeks. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Everspin Technologies’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Everspin Technologies

What's The Opportunity In Everspin Technologies?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Everspin Technologies’s ratio of 16.92x is trading slightly below its industry peers’ ratio of 17.01x, which means if you buy Everspin Technologies today, you’d be paying a reasonable price for it. And if you believe Everspin Technologies should be trading in this range, then there isn’t much room for the share price to grow beyond the levels of other industry peers over the long-term. Is there another opportunity to buy low in the future? Since Everspin Technologies’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.

Can we expect growth from Everspin Technologies?

earnings-and-revenue-growth
NasdaqGM:MRAM Earnings and Revenue Growth September 2nd 2022

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Everspin Technologies, it is expected to deliver a highly negative earnings growth in the upcoming, 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? MRAM seems priced close to industry peers right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in 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 MRAM, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on MRAM for a while, now may not be the most optimal time to buy, given it is trading around industry price multiples. This 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 crystallize your views on MRAM should the price fluctuate below the industry PE ratio.

If you want to dive deeper into Everspin Technologies, you'd also look into what risks it is currently facing. Case in point: We've spotted 4 warning signs for Everspin Technologies you should be mindful of and 1 of them is significant.

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

What are the risks and opportunities for Everspin Technologies?

Everspin Technologies, Inc. manufactures and sells magnetoresistive random access memory (MRAM) products in the United States, Hong Kong, Japan, China, Canada, and internationally.

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Rewards

  • Trading at 85.9% below our estimate of its fair value

  • Became profitable this year

Risks

  • Earnings are forecast to decline by an average of 161% per year for the next 3 years

  • Shareholders have been diluted in the past year

  • Significant insider selling over the past 3 months

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Share Price

Market Cap

1Y Return

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Further research on
Everspin Technologies

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About NasdaqGM:MRAM

Everspin Technologies

Everspin Technologies, Inc. manufactures and sells magnetoresistive random access memory (MRAM) products in the United States, Hong Kong, Japan, China, Canada, and internationally.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation4
Future Growth0
Past Performance4
Financial Health6
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Flawless balance sheet and good value.