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In February 2025, InvestingPro’s Fair Value model identified significant overvaluation in CorVel Corporation (NASDAQ:CRVL) shares, demonstrating the powerful advantage of comprehensive valuation analysis in making informed investment decisions. For investors seeking similar opportunities, current overvalued stocks can be found on our Most overvalued list.
CorVel Corporation, a $3.6 billion healthcare management services provider, has seen its shares decline substantially since InvestingPro’s analysis flagged concerns about its valuation. The company, which specializes in workers’ compensation solutions and network health management services, showed signs of stretched valuations despite solid fundamental performance.
When InvestingPro’s Fair Value model identified the overvaluation on February 5, 2025, CRVL was trading at $128.46. The model’s analysis suggested a fair value significantly below the trading price, projecting potential downside of 35.23%. At the time, the company reported revenue of $871.31 million and EBITDA of $138.72 million, with earnings per share of $1.72.
The subsequent market performance has strongly validated InvestingPro’s analysis. CRVL shares have declined by 43.45%, currently trading at $70.58. This price movement aligns remarkably well with the model’s projected downside, demonstrating the accuracy of InvestingPro’s valuation methodology.
Recent developments have further supported the bearish thesis. Despite reporting Q4 earnings beats and revenue growth of 12% year-over-year, the stock has continued to decline. Notably, multiple insider sales have occurred during this period, with several executives and directors, including the CIO and CFO, selling substantial positions. The stock has repeatedly hit new 52-week lows, most recently at $70.47.
InvestingPro’s Fair Value analysis combines multiple valuation methodologies, including discounted cash flow models, comparable company analyses, and market range assessments. This comprehensive approach helps investors identify potential mispricings before they correct, as demonstrated in this case with CorVel.
The success of this analysis showcases the value of professional-grade investment tools in making market decisions. InvestingPro offers investors access to these sophisticated valuation models, along with real-time alerts, insider trading analysis, and fundamental health scores. In today’s volatile market environment, having access to professional-grade analysis tools can make the difference between avoiding significant losses and being caught in overvalued positions.