U.S. Markets open in 1 hr 26 mins

Is Now An Opportune Moment To Examine EDAP TMS S.A. (NASDAQ:EDAP)?

Simply Wall St

EDAP TMS S.A. (NASDAQ:EDAP), which is in the medical equipment business, and is based in France, saw significant share price movement during recent months on the NASDAQGM, rising to highs of US$5.38 and falling to the lows of US$4.30. 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 EDAP TMS's current trading price of US$4.33 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 EDAP TMS’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for EDAP TMS

What's the opportunity in EDAP TMS?

Good news, investors! EDAP TMS is still a bargain right now. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that EDAP TMS’s ratio of 31.77x is below its peer average of 45.15x, which suggests the stock is undervalued compared to the Medical Equipment industry. What’s more interesting is that, EDAP TMS’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from EDAP TMS?

NasdaqGM:EDAP Past and Future Earnings, December 31st 2019

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 99% over the next couple of years, the future seems bright for EDAP TMS. 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 EDAP is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive 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 EDAP 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 EDAP. 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 EDAP TMS. You can find everything you need to know about EDAP TMS in the latest infographic research report. If you are no longer interested in EDAP TMS, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

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.

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. Thank you for reading.