At US$06.42, Is NeoPhotonics Corporation (NYSE:NPTN) A Buy?
NeoPhotonics Corporation (NYSE:NPTN), a semiconductor company based in United States, saw a significant share price rise of over 20% in the past couple of months on the NYSE. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on NeoPhotonics’s outlook and valuation to see if the opportunity still exists. See our latest analysis for NeoPhotonics
Is NeoPhotonics still cheap?
According to my valuation model, NeoPhotonics seems to be fairly priced at around 19.61% above my intrinsic value, which means if you buy NeoPhotonics today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $5.37, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, NeoPhotonics’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.
Can we expect growth from NeoPhotonics?
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 the company’s future expectations. With profit expected to grow by 34.57% over the next year, the near-term future seems bright for NeoPhotonics. 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? It seems like the market has already priced in NPTN’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 financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on NPTN, now may not be the most optimal 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 NeoPhotonics. You can find everything you need to know about NeoPhotonics in the latest infographic research report. If you are no longer interested in NeoPhotonics, 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.
