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While Proto Labs, Inc. (NYSE:PRLB) might not have the largest market cap around , it saw a significant share price rise of 37% in the past couple of months on the NYSE. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. 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, what if the stock is still a bargain? Let’s take a look at Proto Labs’s outlook and value based on the most recent financial data to see if the opportunity still exists.
See our latest analysis for Proto Labs
What Is Proto Labs Worth?
Good news, investors! Proto Labs is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is $56.85, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Proto Labs’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Proto Labs?
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. However, with a negative profit growth of -18% expected next year, near-term growth certainly doesn’t appear to be a driver for a buy decision for Proto Labs. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Although PRLB is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. We recommend you think about whether you want to increase your portfolio exposure to PRLB, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on PRLB for a while, but hesitant on making the leap, we recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Our analysis shows 2 warning signs for Proto Labs (1 doesn't sit too well with us!) and we strongly recommend you look at these before investing.