RadiSys Corporation (NASDAQ:RSYS), a electronic equipment, instruments and components company based in United States, saw a decent share price growth in the teens level on the NasdaqGS over the last few months. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine RSYS’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. See our latest analysis for RSYS
What’s the opportunity in RSYS?
Great news for investors – RSYS is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $1.87, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because RSYS’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, RSYS’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of RSYS 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. With profit expected to grow by 34.30% over the next year, the near-term future seems bright for RSYS. 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? Since RSYS is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on RSYS for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy RSYS. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.