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Mesa Laboratories, Inc. (NASDAQ:MLAB), might not be a large cap stock, but it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. The company's trading levels have reached its high for the past year, following the recent bounce in the share price. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine Mesa Laboratories’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for Mesa Laboratories
What's The Opportunity In Mesa Laboratories?
Good news, investors! Mesa Laboratories is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is $183.85, but it is currently trading at US$138 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Mesa Laboratories’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
What does the future of Mesa Laboratories 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. 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 revenues expected to grow by a double-digit 12% over the next couple of years, the outlook is positive for Mesa Laboratories. If the level of expenses is able to be maintained, it looks like higher cash flow 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 MLAB is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic 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 capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on MLAB for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MLAB. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.