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Is It Time To Consider Buying U.S. Physical Therapy, Inc. (NYSE:USPH)?

Simply Wall St

U.S. Physical Therapy, Inc. (NYSE:USPH), which is in the healthcare business, and is based in United States, received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $120.96 at one point, and dropping to the lows of $99.43. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether U.S. Physical Therapy’s current trading price of $108.06 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at U.S. Physical Therapy’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for U.S. Physical Therapy

What’s the opportunity in U.S. Physical Therapy?

According to my valuation model, U.S. Physical Therapy seems to be fairly priced at around 17.88% above my intrinsic value, which means if you buy U.S. Physical Therapy today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $91.67, then there isn’t really any room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since U.S. Physical Therapy’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 does the future of U.S. Physical Therapy look like?

NYSE:USPH Past and Future Earnings, February 28th 2019

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. With profit expected to more than double over the next couple of years, the future seems bright for U.S. Physical Therapy. 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 USPH’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 USPH, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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 U.S. Physical Therapy. You can find everything you need to know about U.S. Physical Therapy in the latest infographic research report. If you are no longer interested in U.S. Physical Therapy, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.