Bio-Path Holdings Inc (NASDAQ:BPTH), a pharmaceuticals company based in United States, received a lot of attention from a substantial price increase on the NasdaqCM in the over the last few months. Less covered, small-stocks like BPTH 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 BPTH still be trading at a low price relative to its actual value? Let’s examine BPTH’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. Check out our latest analysis for Bio-Path Holdings
What is BPTH worth?
According to my relative valuation model, BPTH seems to be currently fairly priced. I’ve used the price-to-book ratio in this instance because there’s not enough visibility to forecast its cash flows, and its earnings doesn’t seem to reflect its true value. The stock’s ratio of 6.4x is currently trading slightly above its industry peers’ ratio of 4.8x, which means if you buy BPTH today, you’d be paying a relatively fair price for it. And if you believe that BPTH should be trading at this level in the long run, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that BPTH’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will BPTH generate?
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 BPTH future expectations. BPTH’s earnings growth are expected to be in the teens in the upcoming year, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in BPTH’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 BPTH? 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 an eye on BPTH, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for BPTH, 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 Bio-Path Holdings. You can find everything you need to know about BPTH in the latest infographic research report. If you are no longer interested in Bio-Path Holdings, 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.