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Lattice Semiconductor Corporation (NASDAQ:LSCC), is not the largest company out there, but it received a lot of attention from a substantial price increase on the NASDAQGS over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today we will analyse the most recent data on Lattice Semiconductor’s outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for Lattice Semiconductor
What's The Opportunity In Lattice Semiconductor?
Lattice Semiconductor appears to be overvalued by 32% at the moment, based on our discounted cash flow valuation. The stock is currently priced at US$58.55 on the market compared to our intrinsic value of $44.37. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Since Lattice Semiconductor’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 Lattice Semiconductor?
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. Lattice Semiconductor's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? LSCC’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe LSCC 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.
Are you a potential investor? If you’ve been keeping an eye on LSCC for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for LSCC, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.