Versartis Inc (NASDAQ:VSAR), a pharmaceuticals, biotechnology and life sciences company based in United States, saw a significant share price rise of over 20% in the past couple of months on the NasdaqGS. 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, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on VSAR’s outlook and valuation to see if the opportunity still exists. See our latest analysis for VSAR

What is VSAR worth?

Great news for investors – VSAR is still trading at a fairly cheap price. In this instance, I’ve used price-to-book ratio (PB) ratio given that there is not enough information to reliably forecast the stock’s cash flows, and its earnings doesn’t seem to reflect its true value. I find that VSAR’s ratio of 8.2x is below its peer average of 14.9x, which suggests the stock is undervalued compared to the pharmaceuticals, biotechnology and life sciences industry. Although, there may be another chance to buy again in the future. This is because VSAR’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, VSAR’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from VSAR?

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 VSAR future expectations. With profit expected to grow by 51.58% over the next couple of years, the future seems bright for VSAR. 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? Since VSAR is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive 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 financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on VSAR 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 VSAR. 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.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Versartis. You can find everything you need to know about VSAR in the latest infographic research report. If you are no longer interested in Versartis, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.