At US$14.06, Is It Time To Put First Foundation Inc. (NASDAQ:FFWM) On Your Watch List?
First Foundation Inc. (NASDAQ:FFWM), operating in the financial services industry based in United States, received a lot of attention from a substantial price movement on the NASDAQGM over the last few months, increasing to $15.6 at one point, and dropping to the lows of $13.18. 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 First Foundation's current trading price of $14.06 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 First Foundation’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 First Foundation
Is First Foundation still cheap?
According to my valuation model, First Foundation seems to be fairly priced at around 12% below my intrinsic value, which means if you buy First Foundation today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $16, then there’s not much of an upside to gain from mispricing. Furthermore, First Foundation’s low beta implies that the stock is less volatile than the wider market.
What kind of growth will First Foundation generate?
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 grow by 48% over the next couple of years, the future seems bright for First Foundation. 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 FFWM’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 FFWM, 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 diving deeper into 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 First Foundation. You can find everything you need to know about First Foundation in the latest infographic research report. If you are no longer interested in First Foundation, 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.
