Advaxis Inc (NASDAQ:ADXS), a pharmaceuticals, biotechnology and life sciences company based in United States, led the NasdaqGS gainers with a relatively large price hike in the past couple of weeks. Less covered, small-stocks like ADXS sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could ADXS still be trading at a low price relative to its actual value? Let’s take a look at ADXS’s outlook and value based on the most recent financial data to see if the opportunity still exists. View our latest analysis for Advaxis
What is ADXS worth?
According to my valuation model, ADXS seems to be fairly priced at around 9% below my intrinsic value, which means if you buy ADXS today, you’d be paying a fair price for it. And if you believe that ADXS is really worth $7.82, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that ADXS’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from ADXS?
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. 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 ADXS, at least in the near future.
What this means for you:
Are you a shareholder? ADXS 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 optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on ADXS, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on ADXS for a while, now may not be the most optimal 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 gel your views on ADXS 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 Advaxis. You can find everything you need to know about ADXS in the latest infographic research report. If you are no longer interested in Advaxis, 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.