Yahoo Finance Have Investors Priced In Internap Corporation’s (NASDAQ:INAP) Growth?
Internap Corporation (NASDAQ:INAP), a internet company based in United States, led the NasdaqGS gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Internap’s outlook and value based on the most recent financial data to see if the opportunity still exists. View out our latest analysis for Internap
Is Internap still cheap?
Internap is currently overpriced based on my relative valuation model. In this instance, I’ve used price-to-book ratio (PB) ratio given that there is not enough information to reliably forecast the stock’s cash flows, and its earnings doesn’t seem to reflect its true value. I find that Internap’s ratio of 45.96x is above its peer average of 3.6x, which suggests the stock is overvalued compared to the Internet industry. But, is there another opportunity to buy low in the future? Given that Internap’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Internap look like?
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. Though in the case of Internap, it is expected to deliver a relatively unexciting earnings growth of 9.34%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Internap, at least in the near term.
What this means for you:
Are you a shareholder? INAP’s future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe INAP 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. 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 INAP for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive growth outlook may mean it’s worth diving deeper into other factors 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 Internap. You can find everything you need to know about Internap in the latest infographic research report. If you are no longer interested in Internap, 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.
