Century Casinos, Inc. (NASDAQ:CNTY), which is in the hospitality business, and is based in United States, received a lot of attention from a substantial price movement on the NASDAQCM over the last few months, increasing to US$10.01 at one point, and dropping to the lows of US$7.06. 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 Century Casinos's current trading price of US$7.39 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 Century Casinos’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is Century Casinos worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 15% below my intrinsic value, which means if you buy Century Casinos today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $8.65, then there’s not much of an upside to gain from mispricing. Furthermore, Century Casinos’s low beta implies that the stock is less volatile than the wider market.
Can we expect growth from Century Casinos?
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. Century Casinos’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? CNTY’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 track record of its management team. 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?
Are you a potential investor? If you’ve been keeping tabs on CNTY, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Century Casinos. You can find everything you need to know about Century Casinos in the latest infographic research report. If you are no longer interested in Century Casinos, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.