New Post has been published on Stock Markets Daily
New Post has been published on http://www.stockmarketsdaily.com/performant-financial-corporation-underpriced-nasdaqpfmt/10746/
Performant Financial Corporation: Bargain Buy (NASDAQ:PFMT)
(adsbygoogle = window.adsbygoogle || []).push();
Performant Financial Corporation (NASDAQ:PFMT) was smashed down nearly 14% on Friday after being downgraded from a buy to a neutral by Compass Point and a changed 12 month price target from $10 to $6 was given. Therefore, we have a look to see if fundamentally the stock may be a bargain buy for investors considering it after the large move. [Trend Analysis]
Performant Financial Corporation (NASDAQ:PFMT) last traded at $5.25 after moving down -13.93% for the trading day.
PFMT is trading with a trailing 12 month P/E multiple of 13.13 and an estimated forward P/E multiple of 9.13. The stock has an estimated 5 year annual growth of 10.02% and a PEG multiple of 1.31.
From a value investor perspective, as mentioned Performant Financial Corporation trades on an estimated forward P/E multiple of 9.13. The current estimated forward P/E ratio for the market as a whole is approximately 19. Therefore, for value investors PFMT appears to be underpriced.
For growth investors, who are more interested in growth into the longer term for the stock, we look at the PEG multiple (P/E to growth) of Performant Financial Corporation (NASDAQ:PFMT). This PEG multiple takes into account the expected long term growth in earnings of Performant Financial Corporation rather than merely the growth for one full earnings period ahead.
As a rule of thumb, growth investors often believe a stock with a PEG of between 0 and 1 is considered to be underpriced, between 1 and 2 to be at fair value and over 2 to be overpriced. Based on the PEG ratio of PFMT being 1.31, we consider Performant Financial Corporation to likely be priced at fair value.
The mean analyst 12 month target price for Performant Financial Corporation (NASDAQ:PFMT) is currently $7.39 or 40.76% above the current price. Additionally, the stock has been as high as $10.97 and as low as $3.65 in the last 52 weeks. Analysts are estimating that PFMT will report earnings per share of $0.09 next quarter.
