Harvard Bioscience Inc (NASDAQ:HBIO), a life sciences company based in United States, saw a significant share price rise of over 20% in the past couple of months on the NasdaqGM. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Today I will analyse the most recent data on Harvard Bioscience’s outlook and valuation to see if the opportunity still exists. View out our latest analysis for Harvard Bioscience
What’s the opportunity in Harvard Bioscience?
According to my valuation model, the stock is currently overvalued by about 65.78%, trading at US$5.05 compared to my intrinsic value of $3.05. This means that the opportunity to buy Harvard Bioscience at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Harvard Bioscience’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.
What kind of growth will Harvard Bioscience generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 56.47% over the next year, the near-term future seems bright for Harvard Bioscience. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in HBIO’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe HBIO should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on HBIO for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for HBIO, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Harvard Bioscience. You can find everything you need to know about Harvard Bioscience in the latest infographic research report. If you are no longer interested in Harvard Bioscience, 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.