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Is Now The Time To Look At Buying Brookdale Senior Living Inc. (NYSE:BKD)?

Simply Wall St

Brookdale Senior Living Inc. (NYSE:BKD), which is in the healthcare business, and is based in United States, received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$8.66 at one point, and dropping to the lows of US$6.95. 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 Brookdale Senior Living's current trading price of US$7.02 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 Brookdale Senior Living’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Brookdale Senior Living

What is Brookdale Senior Living worth?

Good news, investors! Brookdale Senior Living is still a bargain right now. According to my valuation, the intrinsic value for the stock is $13.44, but it is currently trading at US$7.02 on the share market, meaning that there is still an opportunity to buy now. However, given that Brookdale Senior Living’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 does the future of Brookdale Senior Living look like?

NYSE:BKD Past and Future Earnings, November 18th 2019

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Brookdale Senior Living, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What this means for you:

Are you a shareholder? Although BKD is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to BKD, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on BKD for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Brookdale Senior Living. You can find everything you need to know about Brookdale Senior Living in the latest infographic research report. If you are no longer interested in Brookdale Senior Living, 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.