Is It The Right Time To Buy Zynerba Pharmaceuticals Inc (ZYNE)?
Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE), a pharmaceuticals company based in United States, received a lot of attention from a substantial price increase on the NasdaqGM in the over the last few months. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine ZYNE’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. Check out our latest analysis for Zynerba Pharmaceuticals
What is ZYNE worth?
Great news for investors – ZYNE is still trading at a fairly cheap price. 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 2.8x is currently well-below the industry average of 4.9x, meaning that it is trading at a cheaper price relative to its peers. However, given that ZYNE’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will ZYNE generate?
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. 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 ZYNE future expectations. However, with a negative profit growth of -19.57% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for ZYNE. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Although ZYNE is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to ZYNE, 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 ZYNE 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 Zynerba Pharmaceuticals. You can find everything you need to know about ZYNE in the latest infographic research report. If you are no longer interested in Zynerba Pharmaceuticals, 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.
