At US$23.23, Is It Time To Put Universal Electronics Inc. (NASDAQ:UEIC) On Your Watch List?
Universal Electronics Inc. (NASDAQ:UEIC), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$28.69 and falling to the lows of US$23.23. 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 Universal Electronics' current trading price of US$23.23 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 Universal Electronics’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Universal Electronics
What's The Opportunity In Universal Electronics?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 12.41% above my intrinsic value, which means if you buy Universal Electronics today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $20.66, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Universal Electronics’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What kind of growth will Universal Electronics 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 the company's future expectations. However, with a relatively muted revenue growth of 3.1% expected in the upcoming year, short term growth doesn’t seem like a key driver for a buy decision for Universal Electronics.
What This Means For You
Are you a shareholder? UEIC’s future growth appears to have been factored into the current share price, 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 conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on UEIC, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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.
Diving deeper into the forecasts for Universal Electronics mentioned earlier will help you understand how analysts view the stock going forward. At Simply Wall St, we have the analysts estimates which you can view by clicking here.
If you are no longer interested in Universal Electronics, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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