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Is It Time To Buy Cornerstone OnDemand Inc (NASDAQ:CSOD)?

Cornerstone OnDemand Inc (NASDAQ:CSOD), a internet company based in United States, received a lot of attention from a substantial price increase on the NasdaqGS over the last few months. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today I will analyse the most recent data on Cornerstone OnDemand’s outlook and valuation to see if the opportunity still exists. See our latest analysis for Cornerstone OnDemand

Is Cornerstone OnDemand still cheap?

According to my relative valuation model, the stock is currently overvalued. In this instance, I’ve used price-to-book ratio (PB) ratio given that there is not enough information to reliably forecast the stock’s cash flows, and its earnings doesn’t seem to reflect its true value. I find that Cornerstone OnDemand’s ratio of 118x is above its peer average of 3.07x, which suggests the stock is overvalued compared to the Internet industry. In addition to this, it seems like Cornerstone OnDemand’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

Can we expect growth from Cornerstone OnDemand?

NasdaqGS:CSOD Future Profit Mar 12th 18
NasdaqGS:CSOD Future Profit Mar 12th 18

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. Cornerstone OnDemand’s earnings over the next few years are expected to increase by 70.83%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? CSOD’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe CSOD should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on CSOD for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for CSOD, which means it’s worth diving deeper into other factors 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 Cornerstone OnDemand. You can find everything you need to know about Cornerstone OnDemand in the latest infographic research report. If you are no longer interested in Cornerstone OnDemand, 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.

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