Yahoo Finance What Is Sensus Healthcare, Inc.'s (NASDAQ:SRTS) Share Price Doing?
Sensus Healthcare, Inc. (NASDAQ:SRTS), is not the largest company out there, but it led the NASDAQCM gainers with a relatively large price hike in the past couple of weeks. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Sensus Healthcare’s outlook and value based on the most recent financial data to see if the opportunity still exists.
See our latest analysis for Sensus Healthcare
What Is Sensus Healthcare Worth?
Great news for investors – Sensus Healthcare is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. 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 Sensus Healthcare’s ratio of 19.09x is below its peer average of 36.97x, which indicates the stock is trading at a lower price compared to the Medical Equipment industry. Sensus Healthcare’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its industry peers, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What kind of growth will Sensus Healthcare generate?
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. However, with a negative profit growth of -5.9% expected next year, near-term growth certainly doesn’t appear to be a driver for a buy decision for Sensus Healthcare. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Although SRTS is currently trading below the industry PE ratio, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to SRTS, 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 SRTS for a while, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current price multiple, 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 while earnings quality is important, it's equally important to consider the risks facing Sensus Healthcare at this point in time. Our analysis shows 4 warning signs for Sensus Healthcare (2 don't sit too well with us!) and we strongly recommend you look at these before investing.
If you are no longer interested in Sensus Healthcare, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
