At US$18.10, Is It Time To Put Stratasys Ltd. (NASDAQ:SSYS) On Your Watch List?

By
Simply Wall St
Published
May 10, 2022
NasdaqGS:SSYS
Source: Shutterstock

Stratasys Ltd. (NASDAQ:SSYS), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$27.89 and falling to the lows of US$18.10. 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 Stratasys' current trading price of US$18.10 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 Stratasys’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Stratasys

What is Stratasys worth?

According to my valuation model, Stratasys seems to be fairly priced at around 10.03% above my intrinsic value, which means if you buy Stratasys today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $16.45, 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 Stratasys’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.

Can we expect growth from Stratasys?

earnings-and-revenue-growth
NasdaqGS:SSYS Earnings and Revenue Growth May 10th 2022

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. Stratasys' earnings over the next few years are expected to increase by 89%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? SSYS’s optimistic 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 financial strength of the company. 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 an eye on SSYS, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which 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.

So while earnings quality is important, it's equally important to consider the risks facing Stratasys at this point in time. At Simply Wall St, we found 2 warning signs for Stratasys and we think they deserve your attention.

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

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.