Universal Health Services Inc (NYSE:UHS) received a lot of attention from a substantial price movement on the NYSE in the over the last few months, increasing to $127.27 at one point, and dropping to the lows of $110.15. 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 Universal Health Services’s current trading price of $120.44 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Universal Health Services’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 Universal Health Services
What’s the opportunity in Universal Health Services?
Good news, investors! Universal Health Services is still a bargain right now. According to my valuation, the intrinsic value for the stock is $178.06, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Universal Health Services’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What does the future of Universal Health Services look like?
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 grow by 35.41% over the next couple of years, the future seems bright for Universal Health Services. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since UHS is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on UHS for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy UHS. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Universal Health Services. You can find everything you need to know about Universal Health Services in the latest infographic research report. If you are no longer interested in Universal Health Services, 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.