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Avid Bioservices, Inc. (NASDAQ:CDMO): Commentary On Fundamentals

Simply Wall St

Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Avid Bioservices, Inc. (NASDAQ:CDMO) due to its excellent fundamentals in more than one area. CDMO is a company with strong financial health as well as a buoyant growth 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, read the full report on Avid Bioservices here.

Exceptional growth potential with excellent balance sheet

Investors in search for stocks with room to flourish should look no further than CDMO, with its expected earnings growth of 71%. Earnings growth is paired with an eye-catching top-line trajectory also doubling over the same period, which indicates a high-quality bottom-line expansion, as opposed to those driven by unsustainable cost-cutting activities. CDMO is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that CDMO manages its cash and cost levels well, which is a key determinant of the company’s health. Looking at CDMO's capital structure, the company has very trivial amounts of debt on its balance sheet. The risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.

NasdaqCM:CDMO Past and Future Earnings, April 12th 2019

Next Steps:

For Avid Bioservices, I've compiled three key factors you should look at:

  1. Historical Performance: What has CDMO'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.
  2. Valuation: What is CDMO 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 CDMO is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CDMO? 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.