Is eHealth Inc (EHTH) Undervalued?
eHealth Inc (NASDAQ:EHTH), a insurance company based in United States, saw a significant share price rise of over 20% in the past couple of months on the NasdaqGS. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at EHTH’s outlook and value based on the most recent financial data to see if the opportunity still exists. View our latest analysis for eHealth
What is EHTH worth?
EHTH appears to be overvalued by 74% at the moment, based on my discounted cash flow valuation. Not the best news for investors looking to buy! The intrinsic value of the stock is $13.43, but it is currently valued by the market at $23.31. But, is there another opportunity to buy low in the future? Since EHTH’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much EHTH moves relative to the rest of the market.
What kind of growth will EHTH generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares.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 EHTH future expectations. However, with an extremely negative double-digit change in profit expected next year, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for EHTH, at least in the near future.
What this means for you:
Are you a shareholder? If you believe EHTH is currently trading above its value, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the risk from a negative growth outlook, this could be the right time to de-risk your portfolio. 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 EHTH for some time, now may not be the best time to enter into the stock. Its price has risen beyond its true value, on top of a negative future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on eHealth. You can find everything you need to know about EHTH in the latest infographic research report. If you are no longer interested in eHealth, 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.
