When Should You Buy WELL Health Technologies Corp. (TSE:WELL)?

WELL Health Technologies Corp. (TSE:WELL), might not be a large cap stock, but it saw a decent share price growth of 11% on the TSX over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today we will analyse the most recent data on WELL Health Technologies’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for WELL Health Technologies

What Is WELL Health Technologies Worth?

Great news for investors – WELL Health Technologies is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is CA$6.66, but it is currently trading at CA$4.01 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, WELL Health Technologies’s 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 for how much the stock moves relative to the rest of the market.

What kind of growth will WELL Health Technologies generate?

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 WELL Health Technologies, at least in the near future.

What This Means For You

Are you a shareholder? Although WELL is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to WELL, 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 an eye on WELL for a while, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

So while earnings quality is important, it's equally important to consider the risks facing WELL Health Technologies at this point in time. In terms of investment risks, we've identified 1 warning sign with WELL Health Technologies, and understanding it should be part of your investment process.

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

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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.