Is It The Right Time To Buy OncoSec Medical Incorporated (ONCS)?
OncoSec Medical Incorporated (NASDAQ:ONCS), a biotechnology company based in United States, led the NasdaqCM gainers with a relatively large price hike in the past couple of weeks. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at ONCS’s outlook and value based on the most recent financial data to see if the opportunity still exists. Check out our latest analysis for OncoSec Medical
Is ONCS still cheap?
Good news, investors! ONCS is still a bargain right now. 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 ONCS’s ratio of 1.6x is below its peer average of 4.4x, which suggests the stock is undervalued compared to the biotechnology industry. Although, there may be another chance to buy again in the future. This is because ONCS’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, ONCS’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from ONCS?
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. Though in the case of ONCS, it is expected to deliver a negative earnings growth of -19.38%, 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 ONCS is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to ONCS, 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 ONCS for a while, but hesitant on making the leap, I recommend you dig deeper 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 OncoSec Medical. You can find everything you need to know about ONCS in the latest infographic research report. If you are no longer interested in OncoSec Medical, 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.
