Is TGTX still cheap?
The stock seems fairly valued at the moment according to my relative valuation model. I’ve used the price-to-book ratio in this instance because there’s not enough visibility to forecast its cash flows, and its earnings doesn’t seem to reflect its true value. The stock’s ratio of 9.2x is currently trading slightly above its industry peers’ ratio of 7.4x, which means if you buy TGTX today, you’d be paying a relatively reasonable price for it. And if you believe that TGTX should be trading at this level in the long run, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because TGTX’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, TGTX’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from TGTX?
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 TGTX future expectations. However, with a relatively muted profit growth of 7.47% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for TGTX, at least in the short term.
What this means for you:
Are you a shareholder? TGTX’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at TGTX? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on TGTX, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for TGTX, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, 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 TG Therapeutics. You can find everything you need to know about TGTX in the latest infographic research report. If you are no longer interested in TG Therapeutics, 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.