$PFSW The Best Cheap Stocks to Buy for $10 or Les
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Posted On: 05/05/2017 2:06:32 PM
$PFSW The Best Cheap Stocks to Buy for $10 or Less: PFSweb (PFSW)
Stock price: ~$7.20
Omni-channel solutions provider PFSweb, Inc. (NASDAQ
FSW) traded above $10 for several years until a tough 2016.
The company had expected solid adjusted EBITDA growth last year. Instead, guidance was cut twice, due in large part to difficulties with a new customer. Full-year profit wound up declining 12% year-over-year, and PFSweb pulled down revenue guidance for 2017 in its Q4 report.
As a result, PFSW stock has been halved over the past year.
But even with all the bad news over the past few quarters, PFSweb simply looks too cheap. Even lowered revenue guidance still suggests 5% to 9% year-over-year sales growth in 2017 — despite PFSweb’s decision to walk away from the troublesome customer. Adjusted EBITDA is guided up at least 26% year-over-year, as margins normalize without that disruption.
And after the decline, PFSW stock looks like one of the best cheap stocks out there — not because of its $7 handle, but because of its value. At the midpoint of guidance, the stock trades at just 6.9 times EBITDA and under 0.7 times revenue on an enterprise basis — both significant discounts to other IT consulting plays.
With PFSweb a clear No. 2 to the eBay Inc (NASDAQ:EBAY) enterprise business, and growth still ahead, those multiples are simply too low.
The Best Cheap Stocks to Buy for $10 or Less: Chegg (CHGG)
Stock Price: ~$8.40
Stock price: ~$7.20
Omni-channel solutions provider PFSweb, Inc. (NASDAQ
FSW) traded above $10 for several years until a tough 2016. The company had expected solid adjusted EBITDA growth last year. Instead, guidance was cut twice, due in large part to difficulties with a new customer. Full-year profit wound up declining 12% year-over-year, and PFSweb pulled down revenue guidance for 2017 in its Q4 report.
As a result, PFSW stock has been halved over the past year.
But even with all the bad news over the past few quarters, PFSweb simply looks too cheap. Even lowered revenue guidance still suggests 5% to 9% year-over-year sales growth in 2017 — despite PFSweb’s decision to walk away from the troublesome customer. Adjusted EBITDA is guided up at least 26% year-over-year, as margins normalize without that disruption.
And after the decline, PFSW stock looks like one of the best cheap stocks out there — not because of its $7 handle, but because of its value. At the midpoint of guidance, the stock trades at just 6.9 times EBITDA and under 0.7 times revenue on an enterprise basis — both significant discounts to other IT consulting plays.
With PFSweb a clear No. 2 to the eBay Inc (NASDAQ:EBAY) enterprise business, and growth still ahead, those multiples are simply too low.
The Best Cheap Stocks to Buy for $10 or Less: Chegg (CHGG)
Stock Price: ~$8.40
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