Flotek Industries Inc (NYSE:FTK), a chemicals company based in United States, received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $6.63 at one point, and dropping to the lows of $3.09. 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 Flotek Industries’s current trading price of $3.29 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 Flotek Industries’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Flotek Industries
Is Flotek Industries still cheap?
Great news for investors – Flotek Industries is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $4.56, but it is currently trading at US$3.29 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Flotek Industries’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, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Flotek Industries?
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 the company’s future expectations. With profit expected to grow by 75.58% over the next year, the near-term future seems bright for Flotek Industries. 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? Since FTK is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on FTK for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy FTK. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Flotek Industries. You can find everything you need to know about Flotek Industries in the latest infographic research report. If you are no longer interested in Flotek Industries, 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.