Is Integer Holdings Corporation (NYSE:ITGR) Potentially Undervalued?

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Integer Holdings Corporation (NYSE:ITGR), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. The company's trading levels have approached the yearly peak, following the recent bounce in the share price. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at Integer Holdings’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Integer Holdings

Is Integer Holdings Still Cheap?

The share price seems sensible at the moment according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. 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 36.86x is currently trading slightly above its industry peers’ ratio of 36.51x, which means if you buy Integer Holdings today, you’d be paying a relatively reasonable price for it. And if you believe Integer Holdings should be trading in this range, then there isn’t really any room for the share price grow beyond the levels of other industry peers over the long-term. So, is there another chance to buy low in the future? Given that Integer Holdings’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Integer Holdings look like?

earnings-and-revenue-growth
NYSE:ITGR Earnings and Revenue Growth October 29th 2024

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. Integer Holdings' earnings over the next few years are expected to increase by 53%, 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 ITGR’s positive outlook, with shares trading around industry price multiples. 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 ITGR? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

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