Axway Software SA (EPA:AXW), which is in the software business, and is based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the ENXTPA. As a small cap stock, which tends to lack high analyst coverage, 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 Axway Software’s outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for Axway Software
Is Axway Software still cheap?
Good news, investors! Axway Software is still a bargain right now. According to my valuation, the intrinsic value for the stock is €18.69, but it is currently trading at €13.20 on the share market, meaning that there is still an opportunity to buy now. However, given that Axway Software’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Axway Software look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 a double-digit 14% over the next couple of years, the outlook is positive for Axway Software. 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 AXW is currently undervalued, it may be a great time to increase 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 capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on AXW for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy AXW. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.