Is Marlin Business Services Corp. (NASDAQ:MRLN) Potentially Undervalued?
Marlin Business Services Corp. (NASDAQ:MRLN), which is in the diversified financial business, and is based in United States, saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$25.19 and falling to the lows of US$21.63. 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 Marlin Business Services's current trading price of US$23.77 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 Marlin Business Services’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 Marlin Business Services
Is Marlin Business Services still cheap?
Great news for investors – Marlin Business Services is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $29.97, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Marlin Business Services’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.
What kind of growth will Marlin Business Services 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. With profit expected to grow by 36% over the next year, the near-term future seems bright for Marlin Business Services. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since MRLN is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. 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 MRLN for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MRLN. 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 Marlin Business Services. You can find everything you need to know about Marlin Business Services in the latest infographic research report. If you are no longer interested in Marlin Business Services, 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.
