Yahoo Finance Is It Time To Buy Mellanox Technologies Ltd (MLNX)?
Mellanox Technologies Ltd (NASDAQ:MLNX), a semiconductors and semiconductor equipment company based in Israel, received a lot of attention from a substantial price movement on the NasdaqGS in the over the last few months, increasing to $47.2 at one point, and dropping to the lows of $42.5. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether MLNX's current trading price of $46.35 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at MLNX’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Mellanox Technologies
What's the opportunity in MLNX?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 11% below my intrinsic value, which means if you buy MLNX today, you’d be paying a reasonable price for it. And if you believe MLNX’s true value is $51.31, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, it seems like MLNX’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because MLNX’s stock is less volatile than the wider market given its low beta.
What does the future of MLNX look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio.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 MLNX future expectations. MLNX’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? MLNX’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at MLNX? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on MLNX, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for MLNX, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Mellanox Technologies. You can find everything you need to know about MLNX in the latest infographic research report. If you are no longer interested in Mellanox Technologies, 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.
