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Esports Entertainment Group, Inc. (NASDAQ:GMBL), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the NASDAQCM over the last few months. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on Esports Entertainment Group’s outlook and valuation to see if the opportunity still exists.
Is Esports Entertainment Group still cheap?
Great news for investors – Esports Entertainment Group is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $14.14, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Esports Entertainment Group’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 Esports Entertainment Group?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 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 a positive 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 prosperous 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 investment decision.
If you want to dive deeper into Esports Entertainment Group, you'd also look into what risks it is currently facing. For instance, we've identified 3 warning signs for Esports Entertainment Group (1 is significant) you should be familiar with.
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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