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Should You Buy CafePress Inc (PRSS) Now?

CafePress Inc (NASDAQ:PRSS), a internet and direct marketing retail company based in United States, saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $2.26 and falling to the lows of $1.74. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether PRSS’s current trading price of $1.76 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 PRSS’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for CafePress

Is PRSS still cheap?

The stock seems fairly valued at the moment according to my relative valuation model. In this instance, I’ve used the price-to-book (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 PRSS’s ratio of 0.8x is trading slightly below its industry peers’ ratio of 2x, which means if you buy PRSS today, you’d be paying a relatively reasonable price for it. And if you believe PRSS should be trading in this range, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, PRSS’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for PRSS to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.

What does the future of PRSS look like?

NasdaqGS:PRSS Future Profit Nov 9th 17
NasdaqGS:PRSS Future Profit Nov 9th 17

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 PRSS future expectations. Though in the case of PRSS, it is expected to deliver a negative earnings growth of -4.37%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What this means for you:

Are you a shareholder? PRSS seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on PRSS, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on PRSS for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on PRSS should the price fluctuate below its true value.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on CafePress. You can find everything you need to know about PRSS in the latest infographic research report. If you are no longer interested in CafePress, 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.

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