Is Now The Time To Look At Buying Syneos Health, Inc. (NASDAQ …

While Syneos Health, Inc. (NASDAQ:SYNH) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US£40.98 and falling to the lows of US£33.32. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Syneos Health’s current trading price of US£34.33 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 Syneos Health’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 Syneos Health

What Is Syneos Health Worth?

Good news, investors!

Syneos Health is still a bargain right now according to my price multiple model, which compares the company’s price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Syneos Health’s ratio of 13.3x is below its peer average of 26.11x, which indicates the stock is trading at a lower price compared to the Life Sciences industry.

Although, there may be another chance to buy again in the future. This is because Syneos Health’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from Syneos Health?

earnings-and-revenue-growthNasdaqGS:SYNH Earnings and Revenue Growth March 29th 2023

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. However, with a negative profit growth of -7.3% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Syneos Health. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although SYNH is currently trading below the industry PE ratio, the adverse prospect of negative growth brings about some degree of risk.

I recommend you think about whether you want to increase your portfolio exposure to SYNH, or whether diversifying into another stock may be a better move for your total risk and return. Are you a potential investor? If you’ve been keeping an eye on SYNH for a while, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current price multiple, now is a great time to make a decision.

But keep in mind the risks that come with negative growth prospects in the future. So while earnings quality is important, it’s equally important to consider the risks facing Syneos Health at this point in time. While conducting our analysis, we found that Syneos Health has 1 warning sign and it would be unwise to ignore this.

If you are no longer interested in Syneos Health, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

What are the risks and opportunities for Syneos Health?

Syneos Health, Inc., operates as an integrated biopharmaceutical solutions company.
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View Full Analysis

Rewards

  • Trading at 46.4% below our estimate of its fair value

  • Earnings are forecast to grow 12.28% per year

  • Earnings grew by 13.5% over the past year

Risks

  • Debt is not well covered by operating cash flow

View all Risks and Rewards

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation.

We aim to bring you long-term focused analysis driven by fundamental data.

Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Simply Wall St has no position in any stocks mentioned.

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