SeaChange International Inc (NASDAQ:SEAC), a software company based in United States, saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $2.77 and falling to the lows of $2.51. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether SEAC’s current trading price of $2.74 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 SEAC’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for SEAC
What’s the opportunity in SEAC?
Good news, investors! SEAC is still a bargain right now. In this instance, I’ve used price-to-book ratio (PB) ratio given that there is not enough information to reliably forecast the stock’s cash flows, and its earnings doesn’t seem to reflect its true value. I find that SEAC’s ratio of 1.5x is below its peer average of 4.2x, which suggests the stock is undervalued compared to the software industry. What’s more interesting is that, SEAC’s share price is 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 SEAC’s stock is less volatile than the wider market given its low beta.
Can we expect growth from SEAC?
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 SEAC future expectations. With profit expected to grow by 84.06% over the next year, the near-term future seems bright for SEAC. 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? Since SEAC 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 financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on SEAC for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy SEAC. 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on SeaChange International. You can find everything you need to know about SEAC in the latest infographic research report. If you are no longer interested in SeaChange International, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.