Is Now The Time To Look At Buying Hudson Technologies, Inc.  (NASDAQ:HDSN)?

Is Now The Time To Look At Buying Hudson Technologies, Inc. (NASDAQ:HDSN)?

While Hudson Technologies, Inc. (NASDAQ:HDSN) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the NASDAQCM over the last few months, increasing to US$11.31 at one point, and dropping to the lows of US$7.55. Some share price movements can give investors a better opportunity to enter the stock, and potentially buy at a lower price. A question to answer is whether Hudson Technologies’ current trading price of US$7.70 reflects 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 Hudson Technologies’ 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 Hudson Technologies

Is Hudson Technologies Still Cheap?

Great news for investors – Hudson Technologies is still trading at a fairly cheap price according to my price multiple model, where I compare the company’s price-to-earnings ratio to the industry average. I’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 3.36x is currently well below the industry average of 12.52x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Hudson Technologies’ share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator of how much the stock moves relative to the rest of the market.

What kind of growth will Hudson Technologies generate?

earnings-and-revenue-growth

earnings-and-revenue-growth

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 matters most, a more compelling investment theses 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 Hudson Technologies, at least in the near future.

What This Means For You

Are you a shareholder? Although HDSN 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 HDSN, 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 tabs on HDSN for some time, but are hesitant on making the leap, I recommend you further research into the stock. Given its multiple current prices, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you’d like to know more about Hudson Technologies as a business, it’s important to be aware of any risks it’s facing. Case in point: We’ve spotted 2 warning signs for Hudson Technologies you should be aware of.

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

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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