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Should You Investigate Benefitfocus, Inc. (NASDAQ:BNFT) At US$24.37?

Simply Wall St

Benefitfocus, Inc. (NASDAQ:BNFT), which is in the software business, and is based in United States, saw significant share price movement during recent months on the NASDAQGM, rising to highs of $28.03 and falling to the lows of $23.4. 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 Benefitfocus's current trading price of $24.37 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 Benefitfocus’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 Benefitfocus

What's the opportunity in Benefitfocus?

Great news for investors – Benefitfocus is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $35.09, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Benefitfocus’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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 kind of growth will Benefitfocus generate?

NasdaqGM:BNFT Past and Future Earnings, September 11th 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. 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. Though in the case of Benefitfocus, it is expected to deliver a relatively unexciting earnings growth of 7.6%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Benefitfocus, at least in the near term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since BNFT is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on BNFT for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy BNFT. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Benefitfocus. You can find everything you need to know about Benefitfocus in the latest infographic research report. If you are no longer interested in Benefitfocus, 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.