Amtech Systems Inc (NASDAQ:ASYS), a semiconductor company based in United States, received a lot of attention from a substantial price movement on the NasdaqGS over the last few months, increasing to $10.22 at one point, and dropping to the lows of $6.88. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Amtech Systems’s current trading price of $7.09 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 Amtech Systems’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Amtech Systems
What’s the opportunity in Amtech Systems?
Good news, investors! Amtech Systems is still a bargain right now. In this instance, I’ve used the price-to-equity (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Amtech Systems’s ratio of 5.06x is below its peer average of 22.84x, which suggests the stock is undervalued compared to the Semiconductor industry. Although, there may be another chance to buy again in the future. This is because Amtech Systems’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What kind of growth will Amtech Systems 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. 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. 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 Amtech Systems, at least in the near future.
What this means for you:
Are you a shareholder? Although ASYS is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to ASYS, 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 ASYS 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 Amtech Systems. You can find everything you need to know about Amtech Systems in the latest infographic research report. If you are no longer interested in Amtech Systems, 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.