Should You Buy Bottomline Technologies (de) Inc (NASDAQ:EPAY) At US$050?
Bottomline Technologies (de) Inc (NASDAQ:EPAY), a software company based in United States, received a lot of attention from a substantial price increase on the NasdaqGS over the last few months. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine Bottomline Technologies (de)’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. View out our latest analysis for Bottomline Technologies (de)
Is Bottomline Technologies (de) still cheap?
According to my valuation model, the stock is currently overvalued by about 94.01%, trading at US$50.00 compared to my intrinsic value of $25.77. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Given that Bottomline Technologies (de)’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 Bottomline Technologies (de) generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With revenues expected to grow by 32.81% over the next couple of years, the future seems bright for Bottomline Technologies (de). If the level of expenses is able to be maintained, it looks like higher cash flows 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 EPAY’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 EPAY 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 tabs on EPAY for some time, 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 optimistic prospect is encouraging for EPAY, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Bottomline Technologies (de). You can find everything you need to know about Bottomline Technologies (de) in the latest infographic research report. If you are no longer interested in Bottomline Technologies (de), 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.
