The Beauty Health Company Inc (NASDAQ:SKIN), may not be a large-cap stock, but it has seen significant price moves in recent months on the NASDAQCM, hitting highs of 13.40 $US and falling to lows of $8.39. Certain movements in the stock price can give investors a better opportunity to get into the stock and potentially buy at a lower price. A question that needs to be answered is does Beauty Health’s current price of $9.10 reflect the true value of small caps? Or is it currently undervalued, giving us the opportunity to buy? Let’s take a look at Beauty Health’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 Beauty Health
Are beauty and health still cheap?
The stock currently seems quite valued according to my valuation model. It’s trading around 12.55% above my intrinsic value, which means if you buy Beauty Health today, you’ll pay a relatively reasonable price for it. And if you think the stock is really worth $8.08, there is only insignificant downside when the price drops to its true value. Additionally, Beauty Health’s low beta means the stock is less volatile than the broader market.
What growth will Beauty Health generate?
Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking to grow your portfolio. Although value investors argue that it is intrinsic value relative to price that matters most, a more compelling investment thesis would be high growth potential at a cheap price. Beauty Health’s profits over the next few years are expected to double, indicating a very optimistic future. This should lead to higher cash flow, fueling higher share value.
What this means for you
Are you a shareholder? It looks like the market has already priced in the positive outlook for SKIN, with the stock trading around its fair value. However, there are also other important factors that we haven’t considered today, such as the background of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy if the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on SKIN, now might not be the most optimal time to buy, given that it’s trading around its fair value. However, the optimistic outlook is encouraging for the company, which means that it is worth looking further into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Diving deeper into the previously mentioned forecast for Beauty Health will help you understand how analysts view the stock going forward. Then do not hesitate to consult our free graph representing the forecasts of the analysts.
If you are no longer interested in Beauty Health, you can use our free platform to view our list of over 50 other stocks with high growth potential.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.