Should You Investigate Veeco Instruments Inc. (NASDAQ:VECO) At US$20.08?

Veeco Instruments Inc. (NASDAQ:VECO), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$28.72 and falling to the lows of US$20.08. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Veeco Instruments' current trading price of US$20.08 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 Veeco Instruments’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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Is Veeco Instruments Still Cheap?

Great news for investors – Veeco Instruments is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Veeco Instruments’s ratio of 15.78x is below its peer average of 24.63x, which indicates the stock is trading at a lower price compared to the Semiconductor industry. However, given that Veeco Instruments’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.

See our latest analysis for Veeco Instruments

What does the future of Veeco Instruments look like?

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. However, with a relatively muted profit growth of 1.1% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Veeco Instruments, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since VECO is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on VECO for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy VECO. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed assessment.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Be aware that Veeco Instruments is showing 2 warning signs in our investment analysis and 1 of those shouldn't be ignored...

If you are no longer interested in Veeco Instruments, 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.