While Guardion Health Sciences, Inc. (NASDAQ:GHSI) might not have the largest market cap around , it saw a significant share price rise of 78% in the past couple of months on the NASDAQCM. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Guardion Health Sciences’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Guardion Health Sciences

What's The Opportunity In Guardion Health Sciences?

According to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average, the stock currently looks expensive. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 72.83x is currently well-above the industry average of 26.11x, meaning that it is trading at a more expensive price relative to its peers. Furthermore, Guardion Health Sciences’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach levels around its industry peers, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What does the future of Guardion Health Sciences look like?

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. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. 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 Guardion Health Sciences, at least in the near future.

What This Means For You

Are you a shareholder? If you believe GHSI should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. Given the risk from a negative growth outlook, this could be the right time to reduce your total portfolio risk. But before you make this decision, take a look at whether its fundamentals have changed.