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Quick Heal Technologies Limited (NSE:QUICKHEAL), which is in the software business, and is based in India, saw significant share price volatility over the past couple of months on the NSEI, rising to the highs of ₹282.7 and falling to the lows of ₹184.3. 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 Quick Heal Technologies’s current trading price of ₹193.9 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 Quick Heal Technologies’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Quick Heal Technologies
Is Quick Heal Technologies still cheap?
According to my relative valuation model, the stock seems to be currently fairly priced. I’ve used the price-to-equity ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 13.69x is currently trading slightly below its industry peers’ ratio of 14.92x, which means if you buy Quick Heal Technologies today, you’d be paying a reasonable price for it. And if you believe Quick Heal Technologies should be trading in this range, then there isn’t much room for the share price grow beyond where it’s currently trading. Is there another opportunity to buy low in the future? Since Quick Heal Technologies’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of Quick Heal Technologies look like?
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. Though in the case of Quick Heal Technologies, it is expected to deliver a negative earnings growth of -3.8%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? Currently, QUICKHEAL appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on QUICKHEAL, take a look at whether its fundamentals have changed.