Today we’re going to take a look at the well-established Symantec Corporation (NASDAQ:SYMC). The company’s stock saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $29.57 and falling to the lows of $25.59. 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 Symantec’s current trading price of $25.91 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Symantec’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for Symantec
What’s the opportunity in Symantec?
Symantec appears to be overvalued by 38% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$25.91 on the market compared to my intrinsic value of $18.84. This means that the buying opportunity has probably disappeared for now. Another thing to keep in mind is that Symantec’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
Can we expect growth from Symantec?
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 an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Symantec, at least in the near future.
What this means for you:
Are you a shareholder? If you believe SYMC should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the risk from a negative growth outlook, this could be the right time to de-risk your portfolio. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on SYMC for some time, now may not be the best time to enter into the stock. Price climbed passed its true value, in addition to a risky future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Symantec. You can find everything you need to know about Symantec in the latest infographic research report. If you are no longer interested in Symantec, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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