What Is Burcon NutraScience Corporation's (TSE:BU) Share Price Doing?
While Burcon NutraScience Corporation (TSE:BU) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the TSX over the last few months, increasing to CA$1.66 at one point, and dropping to the lows of CA$1.01. 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 Burcon NutraScience's current trading price of CA$1.01 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 Burcon NutraScience’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 Burcon NutraScience
What is Burcon NutraScience worth?
According to my valuation model, the stock is currently overvalued by about 37%, trading at CA$1.01 compared to my intrinsic value of CA$0.74. Not the best news for investors looking to buy! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Burcon NutraScience’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will Burcon NutraScience 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. With profit expected to grow by 69% over the next couple of years, the future seems bright for Burcon NutraScience. It looks like higher cash flow 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 BU’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe BU 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 an eye on BU for a while, 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 positive outlook is encouraging for BU, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
If you want to dive deeper into Burcon NutraScience, you'd also look into what risks it is currently facing. Be aware that Burcon NutraScience is showing 4 warning signs in our investment analysis and 1 of those is potentially serious...
If you are no longer interested in Burcon NutraScience, 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.