Esports Entertainment Group, Inc. (NASDAQ:GMBL), is not the largest company out there, but it received a lot of attention from a substantial price movement on the NASDAQCM over the last few months, increasing to US$13.30 at one point, and dropping to the lows of US$8.57. 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 Esports Entertainment Group's current trading price of US$8.92 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 Esports Entertainment Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What's the opportunity in Esports Entertainment Group?
Good news, investors! Esports Entertainment Group is still a bargain right now. According to my valuation, the intrinsic value for the stock is $14.59, but it is currently trading at US$8.92 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Esports Entertainment Group’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will Esports Entertainment Group generate?NasdaqCM:GMBL Earnings and Revenue Growth August 2nd 2021
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. 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. With profit expected to grow by 96% over the next couple of years, the future seems bright for Esports Entertainment Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since GMBL is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on GMBL for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy GMBL. 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 buy.
In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example, Esports Entertainment Group has 3 warning signs (and 1 which is potentially serious) we think you should know about.
If you are no longer interested in Esports Entertainment Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
This article by Simply Wall St is general in nature. 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.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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