Should You Buy Atara Biotherapeutics Inc (ATRA) Now?
Atara Biotherapeutics Inc (NASDAQ:ATRA), a pharmaceuticals, biotechnology and life sciences company based in United States, saw a double-digit share price rise of over 10% 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? Let’s take a look at ATRA’s outlook and value based on the most recent financial data to see if the opportunity still exists. See our latest analysis for ATRA
What is ATRA worth?
Good news, investors! ATRA is still a bargain right now. 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 ATRA’s ratio of 2.1x is below its peer average of 7.2x, which suggests the stock is undervalued compared to the pharmaceuticals, biotechnology and life sciences industry. However, given that ATRA’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will ATRA generate?
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 ATRA future expectations. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for ATRA, at least in the near future.
What this means for you:
Are you a shareholder? Although ATRA is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to ATRA, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on ATRA for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Atara Biotherapeutics. You can find everything you need to know about ATRA in the latest infographic research report. If you are no longer interested in Atara Biotherapeutics, 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.
