Neovasc Inc (TSX:NVCN), a medical equipment company based in Canada, saw significant share price volatility over the past couple of months on the TSX, rising to the highs of CA$0.84 and falling to the lows of CA$0.19. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Neovasc’s current trading price of CA$0.19 reflective of 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 Neovasc’s 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 Neovasc

What’s the opportunity in Neovasc?

Good news, investors! Neovasc is still a bargain right now. I’ve used the price-to-equity ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 0.58x is currently well-below the industry average of 33.41x, meaning that it is trading at a cheaper price relative to its peers. However, given that Neovasc’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Neovasc look like?

What this means for you:

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. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Though in the case of Neovasc, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

Are you a shareholder? Although NVCN is currently undervalued, 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 NVCN, 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 NVCN for some time, but hesitant on making the leap, I 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.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Neovasc. You can find everything you need to know about Neovasc in the latest infographic research report. If you are no longer interested in Neovasc, you can use our free platform to see my list of over 50 other stocks with a high growth potential.