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Let's talk about the popular SS&C Technologies Holdings, Inc. (NASDAQ:SSNC). The company's shares received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$77.36 at one point, and dropping to the lows of US$69.93. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether SS&C Technologies Holdings' current trading price of US$76.67 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at SS&C Technologies Holdings’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 SS&C Technologies Holdings
What Is SS&C Technologies Holdings Worth?
According to our price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that SS&C Technologies Holdings’s ratio of 26.87x is trading slightly above its industry peers’ ratio of 24.5x, which means if you buy SS&C Technologies Holdings today, you’d be paying a relatively reasonable price for it. And if you believe SS&C Technologies Holdings should be trading in this range, then there isn’t really any room for the share price grow beyond the levels of other industry peers over the long-term. So, is there another chance to buy low in the future? Given that SS&C Technologies Holdings’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of SS&C Technologies Holdings look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. SS&C Technologies Holdings' earnings over the next few years are expected to increase by 55%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.