What Is A10 Networks, Inc.'s (NYSE:ATEN) Share Price Doing?

While A10 Networks, Inc. (NYSE:ATEN) might not have the largest market cap around , it saw a decent share price growth of 12% on the NYSE over the last few months. While good news for shareholders, the company has traded much higher in the past year. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine A10 Networks’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for A10 Networks

What Is A10 Networks Worth?

Good news, investors! A10 Networks is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 23.38x is currently well-below the industry average of 40.12x, meaning that it is trading at a cheaper price relative to its peers. Although, there may be another chance to buy again in the future. This is because A10 Networks’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 kind of growth will A10 Networks generate?

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 a negative profit growth of -7.2% expected next year, near-term growth certainly doesn’t appear to be a driver for a buy decision for A10 Networks. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although ATEN is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. We recommend you think about whether you want to increase your portfolio exposure to ATEN, 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 an eye on ATEN for a while, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. While conducting our analysis, we found that A10 Networks has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in A10 Networks, 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.