Is There Now An Opportunity In STRATA Skin Sciences, Inc. (NASDAQ:SSKN)?
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STRATA Skin Sciences, Inc. (NASDAQ:SSKN), which is in the medical equipment business, and is based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQCM. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on STRATA Skin Sciences’s outlook and valuation to see if the opportunity still exists.
View our latest analysis for STRATA Skin Sciences
What is STRATA Skin Sciences worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 8.26% above my intrinsic value, which means if you buy STRATA Skin Sciences today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $2.74, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because STRATA Skin Sciences’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of STRATA Skin Sciences look like?
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 94% over the next couple of years, the future seems bright for STRATA Skin Sciences. 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? SSKN’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on SSKN, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, 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 STRATA Skin Sciences. You can find everything you need to know about STRATA Skin Sciences in the latest infographic research report. If you are no longer interested in STRATA Skin Sciences, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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 editorial-team@simplywallst.com.
