Synaptics Incorporated (NASDAQ:SYNA), which is in the semiconductor business, and is based in United States, received a lot of attention from a substantial price movement on the NasdaqGS over the last few months, increasing to $50.11 at one point, and dropping to the lows of $35.31. 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 Synaptics’s current trading price of $38.13 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 Synaptics’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is Synaptics still cheap?The stock seems fairly valued at the moment according to my valuation model. It’s trading around 1.17% above my intrinsic value, which means if you buy Synaptics today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $37.69, there’s only an insignificant downside when the price falls to its real value. In addition to this, it seems like Synaptics’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from Synaptics?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 a relatively muted revenue growth of 9.1% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Synaptics, at least in the short term.
What this means for you:
Are you a shareholder? SYNA’s future growth appears to have been factored into the current share price, 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 the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on SYNA, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth further examining 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 Synaptics. You can find everything you need to know about Synaptics in the latest infographic research report. If you are no longer interested in Synaptics, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.