Electronics for Imaging Inc (NASDAQ:EFII), a tech company based in United States, received a lot of attention from a substantial price increase on the NasdaqGS over the last few months. 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. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Electronics for Imaging’s outlook and valuation to see if the opportunity still exists. See our latest analysis for Electronics for Imaging
What is Electronics for Imaging worth?The stock is currently trading at US$34.39 on the share market, which means it is overvalued by 39.49% compared to my intrinsic value of $24.65. This means that the opportunity to buy Electronics for Imaging at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Electronics for Imaging’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 Electronics for Imaging?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. 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. With revenues expected to grow by a double-digit 11.60% over the next couple of years, the outlook is positive for Electronics for Imaging. If the level of expenses is able to be maintained, it looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in EFII’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe EFII should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on EFII for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for EFII, which means it’s worth diving deeper into other factors 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 Electronics for Imaging. You can find everything you need to know about Electronics for Imaging in the latest infographic research report. If you are no longer interested in Electronics for Imaging, you can use our free platform to see my list of over 50 other stocks with a high growth potential.