Why ChromaDex Corporation (NASDAQ:CDXC) Could Be Worth Watching
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ChromaDex Corporation (NASDAQ:CDXC), which is in the life sciences business, and is based in United States, saw a significant share price rise of over 20% in the past couple of months on the NASDAQCM. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine ChromaDex’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for ChromaDex
Is ChromaDex still cheap?
ChromaDex appears to be overvalued by 49.36% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$3.84 on the market compared to my intrinsic value of $2.57. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Given that ChromaDex’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from ChromaDex?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 81% over the next couple of years, the future seems bright for ChromaDex. 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 well and truly priced in CDXC’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe CDXC should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on CDXC for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for CDXC, which means it’s worth diving deeper into other factors 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 ChromaDex. You can find everything you need to know about ChromaDex in the latest infographic research report. If you are no longer interested in ChromaDex, 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.
