Advertisement
Canada markets open in 2 minutes
  • S&P/TSX

    21,639.10
    -59.00 (-0.27%)
     
  • S&P 500

    5,431.60
    -2.14 (-0.04%)
     
  • DOW

    38,589.16
    -57.94 (-0.15%)
     
  • CAD/USD

    0.7275
    -0.0009 (-0.12%)
     
  • CRUDE OIL

    79.01
    +0.56 (+0.71%)
     
  • Bitcoin CAD

    90,269.54
    -1,357.05 (-1.48%)
     
  • CMC Crypto 200

    1,366.18
    -21.98 (-1.58%)
     
  • GOLD FUTURES

    2,340.00
    -9.10 (-0.39%)
     
  • RUSSELL 2000

    2,006.16
    -32.75 (-1.61%)
     
  • 10-Yr Bond

    4.2710
    +0.0580 (+1.38%)
     
  • NASDAQ futures

    19,683.25
    -2.25 (-0.01%)
     
  • VOLATILITY

    13.07
    +0.41 (+3.24%)
     
  • FTSE

    8,145.95
    -0.91 (-0.01%)
     
  • NIKKEI 225

    38,102.44
    -712.12 (-1.83%)
     
  • CAD/EUR

    0.6786
    -0.0012 (-0.18%)
     

Is hVIVO plc (LON:HVO) Potentially Undervalued?

While hVIVO plc (LON:HVO) might not have the largest market cap around , it led the AIM gainers with a relatively large price hike in the past couple of weeks. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at hVIVO’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for hVIVO

What's The Opportunity In hVIVO?

According to our valuation model, hVIVO seems to be fairly priced at around 5.7% below our intrinsic value, which means if you buy hVIVO today, you’d be paying a fair price for it. And if you believe the company’s true value is £0.28, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because hVIVO’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from hVIVO?

earnings-and-revenue-growth
earnings-and-revenue-growth

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. 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. hVIVO's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in HVO’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 financial strength of the company. 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?

ADVERTISEMENT

Are you a potential investor? If you’ve been keeping tabs on HVO, now may not be the most advantageous 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into hVIVO, you'd also look into what risks it is currently facing. For example - hVIVO has 2 warning signs we think you should be aware of.

If you are no longer interested in hVIVO, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.