Arbutus Biopharma Corporation (NASDAQ:ABUS), a biotechnology company based in Canada, saw a significant share price rise of over 20% in the past couple of months on the NasdaqGS. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today I will analyse the most recent data on ABUS’s outlook and valuation to see if the opportunity still exists. View our latest analysis for Arbutus Biopharma
What is ABUS worth?
Great news for investors – ABUS is still trading at a fairly cheap price. In this instance, I’ve used price-to-book ratio (PB) ratio given that there is not enough information to reliably forecast the stock’s cash flows, and its earnings doesn’t seem to reflect its true value. I find that ABUS’s ratio of 1.8x is below its peer average of 4.4x, which suggests the stock is undervalued compared to the biotechnology industry. Although, there may be another chance to buy again in the future. This is because ABUS’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, ABUS’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of ABUS look like?
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 ABUS future expectations. ABUS’s earnings over the next few years are expected to increase by 72.82%, 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? Since ABUS is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on ABUS for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ABUS. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Arbutus Biopharma. You can find everything you need to know about ABUS in the latest infographic research report. If you are no longer interested in Arbutus Biopharma, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.