What Is Codexis, Inc.'s (NASDAQ:CDXS) Share Price Doing?

Codexis, Inc. (NASDAQ:CDXS), is not the largest company out there, but it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$6.76 at one point, and dropping to the lows of US$3.81. 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 Codexis' current trading price of US$3.90 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 Codexis’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Codexis

Is Codexis Still Cheap?

The stock is currently trading at US$3.90 on the share market, which means it is overvalued by 33% compared to my intrinsic value of $2.92. This means that the opportunity to buy Codexis at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Codexis’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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 does the future of Codexis look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 Codexis, at least in the near future.

What This Means For You

Are you a shareholder? If you believe CDXS should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the risk from a negative growth outlook, this could be the right time to reduce your total portfolio risk. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on CDXS for a while, now may not be the best time to enter into the stock. you may want to reconsider buying the stock at this time. The company’s price has climbed passed its true value, in addition to a risky future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?

So while earnings quality is important, it's equally important to consider the risks facing Codexis at this point in time. In terms of investment risks, we've identified 2 warning signs with Codexis, and understanding these should be part of your investment process.

If you are no longer interested in Codexis, 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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here