Is Tandem Diabetes Care, Inc. (NASDAQ:TNDM) Potentially Undervalued?
Tandem Diabetes Care, Inc. (NASDAQ:TNDM), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NASDAQGM over the last few months, increasing to US$43.71 at one point, and dropping to the lows of US$24.18. 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 Tandem Diabetes Care's current trading price of US$25.98 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 Tandem Diabetes Care’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 Tandem Diabetes Care
What Is Tandem Diabetes Care Worth?
According to my valuation model, Tandem Diabetes Care seems to be fairly priced at around 0.8% below my intrinsic value, which means if you buy Tandem Diabetes Care today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $26.18, then there’s not much of an upside to gain from mispricing. In addition to this, Tandem Diabetes Care has a low beta, which suggests its share price is less volatile than the wider market.
Can we expect growth from Tandem Diabetes Care?
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. 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. With profit expected to grow by 93% over the next couple of years, the future seems bright for Tandem Diabetes Care. 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? It seems like the market has already priced in TNDM’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. 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 TNDM, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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.
Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Tandem Diabetes Care.
If you are no longer interested in Tandem Diabetes Care, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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