At $48.60, is it worth a close look at IRadimed Corporation (NASDAQ: IRMD)?
IRadimed Corporation (NASDAQ:IRMD), may not be a large-cap stock, but it has seen a significant rise in stock price of over 20% in the past two months on the NASDAQCM. As a small-cap stock, barely covered by analysts, there’s usually more opportunity for mispricing because there’s less activity to bring the stock closer to its fair value. Is there still a possibility here to buy? Today, I will analyze the most recent outlook and valuation data for IRadimed to see if the opportunity still exists.
See our latest analysis for IRadimed
What is the IRadimed opportunity?
IRadimed appears to be expensive according to my multiple price model, which compares the company’s price-earnings ratio to the industry average. In this case, I used the Price/Earnings (PE) ratio since there is not enough information to reliably predict the stock’s cash flow. I find IRadimed’s ratio of 64.32x to be higher than its average of 45.68x, suggesting the stock is trading at a higher price relative to the medical equipment industry. Another thing to keep in mind is that Iradimed’s share price is quite stable compared to the rest of the market, as indicated by its low beta. This means that if you think the current stock price should move closer to the levels of its industry peers over time, a low beta could suggest that it is not likely to reach that level. soon, and once he is there, it can be difficult for him to fall back into an attractive buying range.
Can we expect IRadimed to grow?
Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking to grow your portfolio. Buying a big company with solid prospects at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. However, with relatively moderate earnings growth of 2.4% expected over the next year, growth does not appear to be a key factor in a buy decision for IRadimed, at least in the short term.
What does this mean to you :
Are you a shareholder? It appears the market has well and truly priced in IRMD’s outlook, with stocks trading above industry price multiples. At this current price, shareholders may ask a different question: should I sell? If you think the IRMD should be trading below its current price, selling at a high price and buying it back when its price drops towards the industry PE ratio can be profitable. But before making this decision, see if its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on IRMD for a while, now might not be the best time to enter the stock. The price has outpaced its industry peers, which means there are likely to be no more benefits associated with poor pricing. However, the positive growth outlook may mean that it is worth digging deeper into other factors in order to take advantage of the next price drop.
Keep in mind that when it comes to analyzing a stock, the risks involved should be noted. You would be interested to know that we have found 2 warning signs for IRadimed and you will want to know them.
If you are no longer interested in IRadimed, you can use our free platform to view our list of over 50 other stocks with high growth potential.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.