Is There Now An Opportunity In Spark New Zealand Limited (NZE:SPK)?
Spark New Zealand Limited (NZSE:SPK), a telecom company based in New Zealand, maintained its current share price over the past couple of month on the NZSE, with a relatively tight range of NZ$3.31 to NZ$3.63. However, does this price actually reflect the true value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Spark New Zealand’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 Spark New Zealand
What’s the opportunity in Spark New Zealand?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 2.98% below my intrinsic value, which means if you buy Spark New Zealand today, you’d be paying a fair price for it. And if you believe the company’s true value is NZ$3.45, then there’s not much of an upside to gain from mispricing. Furthermore, it seems like Spark New Zealand’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will Spark New Zealand generate?
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. Though in the case of Spark New Zealand, it is expected to deliver a relatively unexciting earnings growth of 8.06%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? SPK’s 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 an eye on SPK, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into 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 Spark New Zealand. You can find everything you need to know about Spark New Zealand in the latest infographic research report. If you are no longer interested in Spark New Zealand, 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.
