The Beauty Health Company (NASDAQ:SKIN), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQCM, rising to highs of US$4.53 and falling to the lows of US$2.26. 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 Beauty Health's current trading price of US$2.26 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Beauty 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 Beauty Health

What's The Opportunity In Beauty Health?

According to our valuation model, Beauty Health seems to be fairly priced at around 15.66% above our intrinsic value, which means if you buy Beauty Health today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $1.95, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Beauty 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 Beauty Health?

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. In the upcoming year, Beauty Health's earnings are expected to increase by 97%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in SKIN’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on SKIN, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.