Yahoo Finance Is Veeco Instruments Inc (NASDAQ:VECO) Undervalued?
Veeco Instruments Inc (NASDAQ:VECO), a semiconductor company based in United States, received a lot of attention from a substantial price movement on the NasdaqGS over the last few months, increasing to $19.75 at one point, and dropping to the lows of $15.45. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Veeco Instruments’s current trading price of $15.7 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Veeco Instruments’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View out our latest analysis for Veeco Instruments
Is Veeco Instruments still cheap?
According to my relative valuation model, the stock seems to be currently fairly priced. I’ve used the price-to-book ratio in this instance because there’s not enough visibility to forecast its cash flows, and its earnings doesn’t seem to reflect its true value. The stock’s ratio of 0.92x is currently trading slightly below its industry peers’ ratio of 2.75x, which means if you buy Veeco Instruments today, you’d be paying a relatively fair price for it. And if you believe that Veeco Instruments should be trading at this level in the long run, then there’s not much of an upside to gain from mispricing. Furthermore, Veeco Instruments’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.
What kind of growth will Veeco Instruments generate?
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 77.68% over the next couple of years, the future seems bright for Veeco Instruments. It looks like higher cash flows 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 VECO’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 VECO? 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 an eye on VECO, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for VECO, 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Veeco Instruments. You can find everything you need to know about Veeco Instruments in the latest infographic research report. If you are no longer interested in Veeco Instruments, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
