Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Avid Bioservices, Inc. (NASDAQ:CDMO) due to its excellent fundamentals in more than one area. CDMO is a company with strong financial health as well as an optimistic future outlook. In the following section, I expand a bit more on these key aspects. If you're interested in understanding beyond my broad commentary, read the full report on Avid Bioservices here.
Exceptional growth potential with excellent balance sheet
Investors in search for stocks with room to flourish should look no further than CDMO, with its expected earnings growth of 81%. The optimistic bottom-line growth is supported by an outstanding revenue growth of 75% over the same time period, which indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. CDMO is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that CDMO has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. CDMO currently has no debt on its balance sheet. It has only utilized funding from its equity capital to run the business, which is typically normal for a small-cap company. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.
For Avid Bioservices, I've compiled three important aspects you should further research:
- Historical Performance: What has CDMO's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Valuation: What is CDMO worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CDMO is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CDMO? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.