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Is It Time To Buy CommScope Holding Company Inc (NASDAQ:COMM)?

Victor Youngblood

CommScope Holding Company Inc (NASDAQ:COMM), a communications company based in United States, saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $32.11 and falling to the lows of $28.92. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether CommScope Holding Company’s current trading price of $31.69 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at CommScope Holding Company’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 CommScope Holding Company

Is CommScope Holding Company still cheap?

According to my valuation model, CommScope Holding Company seems to be fairly priced at around 7.5% below my intrinsic value, which means if you buy CommScope Holding Company today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $34.25, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since CommScope Holding Company’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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 CommScope Holding Company generate?

NasdaqGS:COMM Future Profit September 3rd 18

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. 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 more than double over the next couple of years, the future seems bright for CommScope Holding Company. 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 COMM’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 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 COMM, 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 CommScope Holding Company. You can find everything you need to know about CommScope Holding Company in the latest infographic research report. If you are no longer interested in CommScope Holding Company, 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.