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Theravance Biopharma Inc (NASDAQ:TBPH), a pharmaceuticals company based in Cayman Islands, received a lot of attention from a substantial price movement on the NasdaqGM in the over the last few months, increasing to $29.71 at one point, and dropping to the lows of $23.37. 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 Theravance Biopharma’s current trading price of $24.25 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 Theravance Biopharma’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 Theravance Biopharma
What’s the opportunity in Theravance Biopharma?
The stock is currently trading at US$24.25 on the share market, which means it is overvalued by 82% compared to my intrinsic value of $13.35. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Since Theravance Biopharma’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.
Can we expect growth from Theravance Biopharma?
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 59.35% over the next couple of years, the future seems bright for Theravance Biopharma. 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? TBPH’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe TBPH should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.