CryoPort, Inc. (NASDAQ: CYRX), a healthcare firm with a market capitalization of $411 million, saw its share price increase by 54.9% over the last month. As a small-cap stock with decent coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could shares still be trading at a relatively cheap price? Let’s take a look at CryoPort’s outlook and value based on its most recent financial data to see if there are any catalysts for a price change.
What Is CryoPort Worth?
CryoPort appears to be overvalued by -24.3% at the moment, based on 6 separate valuation models. The stock is currently trading at $14.84 on the market compared to our average intrinsic value of $11.23. This means that the opportunity to buy CryoPort at a good price has disappeared.
|Analysis||Model Fair Value||Upside (Downside)|
|10-yr DCF Revenue Exit||$16.78||13.0%|
|5-yr DCF Revenue Exit||$8.79||-40.8%|
|10-yr DCF EBITDA Exit||$11.96||-19.4%|
|5-yr DCF EBITDA Exit||$13.30||-10.4%|
|10-yr DCF Growth Exit||$8.37||-43.6%|
|5-yr DCF Growth Exit||$8.19||-44.8%|
Click on any of the analyses above to view the latest model with real-time data.
However, will there be another opportunity to buy low in the future? Given that CryoPort’s stock is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) could mean the price can sink lower, giving investors another chance to buy in the future. This is based on its beta of 1.67, which is a good indicator for share price volatility.
How Much Growth Will CryoPort Generate?
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 the company’s future expectations.
source: finbox.io data explorer
CryoPort’s revenue growth is expected to average 40.4% over the next five fiscal years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.
While many investors tend to categorize stocks as either value or growth plays, the most successful investors view growth in conjunction with a company’s value. Take legendary investor Peter Lynch for example, who is widely known for popularizing the term growth at a reasonable price (GARP).
GARP is a strategy that combines aspects of both growth and value investing techniques by finding high growth companies that don’t trade at overly high valuations. In the application of this strategy, Lynch achieved 29% annualized returns as the manager of Fidelity’s Magellan Fund from 1977 to 1990. Needless to say the importance of analyzing a company’s fair value in addition to its growth prospects.
CryoPort has positioned itself so that double-digit growth appears to be a reasonable assumption for the foreseeable future. However, this growth does not look highly attractive at current trading levels. As such, investors may want to hold off on buying or adding to their CYRX position for the time being.
However, if you have not done so already, I highly recommend you complete your research on CryoPort by taking a look at the following:
Efficiency Metrics: fixed asset turnover is calculated by dividing revenue by average fixed assets. View CryoPort’s fixed asset turnover here.
Risk Metrics: how much interest coverage does CryoPort have? This is a ratio used to assess a firm’s ability to pay interest expenses based on operating profits (EBIT). View the company’s interest coverage here.
Valuation Metrics: what is CryoPort’s short ratio and how does it compare to its publicly traded peers? It represents the percentage of total shares outstanding that is being shorted. View the short ratio here.
As of this writing, I did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.