Quantum Corporation (NYSE:QTM), a tech company based in United States, received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $6.4 at one point, and dropping to the lows of $3.41. 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 Quantum’s current trading price of $3.6 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 Quantum’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for Quantum
Is Quantum still cheap?
Good news, investors! Quantum is still a bargain right now. According to my valuation, the intrinsic value for the stock is $5.27, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Quantum’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Quantum?
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 Quantum, it is expected to deliver a relatively unexciting top-line growth of 0.004% over the next year, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since QTM is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on QTM for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy QTM. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, 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 Quantum. You can find everything you need to know about Quantum in the latest infographic research report. If you are no longer interested in Quantum, 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.