LightPath Technologies Inc (NASDAQ:LPTH) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of LPTH, it is a financially-healthy company with a a strong track record of performance, trading at a great value. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on LightPath Technologies here.
Undervalued with solid track record
LPTH delivered a triple-digit bottom-line expansion over the past couple of years, with its most recent earnings level surpassing its average level over the last five years. This illustrates a strong track record, leading to a satisfying return on equity of 22.8%, which paints a buoyant picture for the company. LPTH is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. LPTH’s has produced operating cash levels of 0.64x total debt over the past year, which implies that LPTH’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
LPTH’s share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of LPTH’s earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the electronic industry, LPTH is also trading below its peers, relative to earnings generated. This supports the theory that LPTH is potentially underpriced.
For LightPath Technologies, I’ve put together three fundamental aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for LPTH’s future growth? Take a look at our free research report of analyst consensus for LPTH’s outlook.
- Dividend Income vs Capital Gains: Does LPTH return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from LPTH as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of LPTH? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past 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. For errors that warrant correction please contact the editor at firstname.lastname@example.org.