Q: Hi
Do you think this stock is over sold?
Would you add to a position?
If yes when....wait a few days?
Thank you
Mike
Do you think this stock is over sold?
Would you add to a position?
If yes when....wait a few days?
Thank you
Mike
5i Research Answer:
We feel the downside pressure today is largely unwarranted given the circumstances. The company is still beating earnings expectations by a wide margin, even given the 20% miss in sales due to a client pushing out revenues. By traditional standards, pushing out cash flows should decrease its current price, but we think the stock is fairly cheap to begin with. It now trades at 6.5X forward earnings and growth continues to be strong. We would wait until it finds a floor, but we think around the $8-9 range would be great value. We just do not like the current negative momentum and would like to see it find a balance.