NTN Buzztime Inc (AMEX:NTN), a media company based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the AMEX. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Today I will analyse the most recent data on NTN Buzztime’s outlook and valuation to see if the opportunity still exists. Check out our latest analysis for NTN Buzztime
Is NTN Buzztime still cheap?
According to my valuation model, the stock is currently overvalued by about 30%, trading at US$5.74 compared to my intrinsic value of $4.43. This means that the buying opportunity has probably disappeared for now. Furthermore, NTN Buzztime’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
Can we expect growth from NTN Buzztime?
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. With profit expected to grow by 59.15% over the next year, the near-term future seems bright for NTN Buzztime. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? NTN’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe NTN should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on NTN for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for NTN, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.