ProQR Therapeutics NV (NASDAQ:PRQR), a pharmaceuticals, biotechnology and life sciences company based in Netherlands, led the NasdaqGM gainers with a relatively large price hike in the past couple of weeks. Less covered, small-stocks like PRQR sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could PRQR still be trading at a low price relative to its actual value? Today I will analyse the most recent data on PRQR’s outlook and valuation to see if the opportunity still exists. Check out our latest analysis for ProQR Therapeutics N.V
What's the opportunity in PRQR?
Good news, investors! PRQR is still a bargain right now. I’ve used the price-to-book ratio in this instance because there’s not enough visibility to forecast its cash flows, and its earnings doesn’t seem to reflect its true value. The stock’s ratio of 3.3x is currently well-below the industry average of 7.2x, meaning that it is trading at a cheaper price relative to its peers. Another thing to keep in mind is that PRQR’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
What kind of growth will PRQR generate?
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 PRQR future expectations. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for PRQR, at least in the near future.
What this means for you:
Are you a shareholder? Although PRQR is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to PRQR, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on PRQR for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on ProQR Therapeutics N.V. You can find everything you need to know about PRQR in the latest infographic research report. If you are no longer interested in ProQR Therapeutics N.V, 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.