Lumos Networks Corp (NASDAQ:LMOS), a telecommunication services company based in United States, saw its share price hover around a small range of $17.84 to $17.98 over the last few weeks. But is this actually reflective of the share value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at LMOS’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 Lumos Networks

What is LMOS worth?

According to my relative valuation model, LMOS seems to be currently fairly priced. In this instance, I’ve used the price-to-book (PB) ratio given that there is not enough information to reliably forecast the stock’s cash flows, and its earnings doesn’t seem to reflect its true value. I find that LMOS’s ratio of 3.1x is trading slightly below its industry peers’ ratio of 3.4x, which means if you buy LMOS today, you’d be paying a relatively fair price for it. And if you believe that LMOS should be trading at this level in the long run, then there’s not much of an upside to gain from mispricing. Furthermore, LMOS’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 LMOS to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.

Can we expect growth from LMOS?

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.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 LMOS future expectations. However, with a relatively muted revenue growth of 5.14% expected in the upcoming year, short term growth doesn’t seem like a key driver for a buy decision for LMOS.

What this means for you:

Are you a shareholder? LMOS’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at LMOS? 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 tabs on LMOS, 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 LMOS, which means it’s worth diving deeper into 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 Lumos Networks. You can find everything you need to know about LMOS in the latest infographic research report. If you are no longer interested in Lumos Networks, 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.