Why Semler Scientific, Inc. (NASDAQ:SMLR) Could Be Worth Watching
Semler Scientific, Inc. (NASDAQ:SMLR), might not be a large cap stock, but it saw a significant share price rise of 75% in the past couple of months on the NASDAQCM. The company is inching closer to its yearly highs following the recent share price climb. As a small cap stock, hardly covered by any analysts, 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? Today we will analyse the most recent data on Semler Scientific’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for Semler Scientific
What Is Semler Scientific Worth?
According to our valuation model, Semler Scientific seems to be fairly priced at around 8.9% below our intrinsic value, which means if you buy Semler Scientific today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $48.70, then there’s not much of an upside to gain from mispricing. What's more, Semler Scientific’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What kind of growth will Semler Scientific 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. With profit expected to grow by 30% over the next year, the near-term future seems bright for Semler Scientific. 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 SMLR’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 track record of its management team. 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 tabs on SMLR, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect 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.
So while earnings quality is important, it's equally important to consider the risks facing Semler Scientific at this point in time. While conducting our analysis, we found that Semler Scientific has 1 warning sign and it would be unwise to ignore it.
If you are no longer interested in Semler Scientific, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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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.
