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At US$53.23, Is Cornerstone OnDemand, Inc. (NASDAQ:CSOD) Worth Looking At Closely?

Simply Wall St

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Cornerstone OnDemand, Inc. (NASDAQ:CSOD), which is in the software business, and is based in United States, saw significant share price movement during recent months on the NASDAQGS, rising to highs of $57.53 and falling to the lows of $51.9. 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 Cornerstone OnDemand's current trading price of $53.23 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Cornerstone OnDemand’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 Cornerstone OnDemand

Is Cornerstone OnDemand still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 10.49% above my intrinsic value, which means if you buy Cornerstone OnDemand today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $48.18, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Cornerstone OnDemand’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 Cornerstone OnDemand look like?

NasdaqGS:CSOD Past and Future Earnings, June 2nd 2019
NasdaqGS:CSOD Past and Future Earnings, June 2nd 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. In the upcoming year, Cornerstone OnDemand’s earnings are expected to increase by 78%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? CSOD’s optimistic 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 track record of its management team. 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 an eye on CSOD, 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 Cornerstone OnDemand. You can find everything you need to know about Cornerstone OnDemand in the latest infographic research report. If you are no longer interested in Cornerstone OnDemand, 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.