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What Is Health Insurance Innovations, Inc.'s (NASDAQ:HIIQ) Share Price Doing?

Simply Wall St

Health Insurance Innovations, Inc. (NASDAQ:HIIQ), which is in the insurance business, and is based in United States, received a lot of attention from a substantial price movement on the NASDAQGM over the last few months, increasing to $30.5 at one point, and dropping to the lows of $17.1. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Health Insurance Innovations's current trading price of $17.13 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 Health Insurance Innovations’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Health Insurance Innovations

What's the opportunity in Health Insurance Innovations?

According to my relative valuation model, the stock seems to be currently fairly priced. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Health Insurance Innovations’s ratio of 19.83x is trading slightly above its industry peers’ ratio of 15.79x, which means if you buy Health Insurance Innovations today, you’d be paying a relatively reasonable price for it. And if you believe that Health Insurance Innovations should be trading at this level in the long run, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Health Insurance Innovations’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Health Insurance Innovations look like?

NasdaqGM:HIIQ Past and Future Earnings, August 20th 2019

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 more than double over the next couple of years, the future seems bright for Health Insurance Innovations. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? HIIQ’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 financial strength of the company. Have these factors changed since the last time you looked at HIIQ? Will you have enough conviction to buy should the price fluctuate below the true value?

Are you a potential investor? If you’ve been keeping an eye on HIIQ, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for HIIQ, 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 Health Insurance Innovations. You can find everything you need to know about Health Insurance Innovations in the latest infographic research report. If you are no longer interested in Health Insurance Innovations, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

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 editorial-team@simplywallst.com. 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.