While Catapult Group International Limited (ASX:CAT) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the ASX, rising to highs of AU$0.94 and falling to the lows of AU$0.71. 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 Catapult Group International's current trading price of AU$0.76 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 Catapult Group International’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 Catapult Group International
What's The Opportunity In Catapult Group International?
According to my valuation model, Catapult Group International seems to be fairly priced at around 16.99% above my intrinsic value, which means if you buy Catapult Group International today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth A$0.65, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Catapult Group International’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Catapult Group International look like?
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. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Catapult Group International's earnings over the next few years are expected to increase by 68%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? CAT’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?