Skullcandy Inc : An appropriate purchase level
Entry price | Target | Stop-loss | Potential |
---|
$5.59 |
$0 |
$5.32 |
-100% |
---|
In the past few sessions, Skullcandy shares have suffered from a sharp fall and is now coming back to significant level support.
From a fundamental viewpoint, Skullcandy seems undervalued in terms of enterprise value. Based on the current price, its market capitalization, plus its net debt, represents 0.44 times its revenues.
This valuation is only 13.7 and 10.45 times the two next years earnings.
Furthermore, EPS estimates have been revised upward in the last few months by analysts.
Skullcandy is oversold and near to the USD 5.5. This situation gives credit to a potential technical rebound. Thus, the stock could find new energy and would rise towards the next USD 6.3 resistance.
Thanks to the technical pattern and Skullcandy’s strong fundamentals, active investors can open long positions above USD 5.5. The downside potential is limited and the timing seems perfect to benefit from a technical rebound.
The goal will be fixed at USD 6.27.
However, a bearish trend would regain the upper hand if the security crosses USD 5.5.
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