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Huami Corporation (NYSE:HMI) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of HMI, it is a company with strong financial health as well as a buoyant future outlook. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on Huami here.
High growth potential with excellent balance sheet
One reason why investors are attracted to HMI is its notable earnings growth potential in the near future of 40%. The optimistic bottom-line growth is supported by an outstanding revenue growth of 78% over the same time period, which indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. HMI is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that HMI has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. HMI seems to have put its debt to good use, generating operating cash levels of 35.38x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
Next Steps:
For Huami, there are three important aspects you should look at:
- Historical Performance: What has HMI’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Valuation: What is HMI worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether HMI is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of HMI? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.