Nanometrics Incorporated (NASDAQ:NANO) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of NANO, it is a financially-healthy company with a buoyant growth outlook, not yet factored into the price. Below, I've touched on some key aspects you should know on a high level. If you're interested in understanding beyond my broad commentary, take a look at the report on Nanometrics here.
Flawless balance sheet and good value
Investors in search for stocks with room to flourish should look no further than NANO, with its expected earinngs growth of 53%, supported by its outstanding capacity to churn out cash from operating activities, which is predicted to ramp up by 97% next year. This indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. NANO's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of NANO's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the semiconductor industry, NANO is also trading below its peers, relative to earnings generated. This supports the theory that NANO is potentially underpriced.
NANO is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that NANO manages its cash and cost levels well, which is a crucial insight into the health of the company. Investors should not worry about NANO’s debt levels because the company has none! This implies that the company is running its operations purely on off equity funding. which is typically normal for a small-cap company. NANO has plenty of financial flexibility, without debt obligations to meet in the short term, as well as the headroom to raise debt should it need to in the future.
For Nanometrics, I've put together three fundamental factors you should look at:
- Historical Performance: What has NANO's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Dividend Income vs Capital Gains: Does NANO return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from NANO as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of NANO? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
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 firstname.lastname@example.org. 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.