Central European Media Enterprises Ltd (NASDAQ:CETV), a media company based in Bermuda, received a lot of attention from a substantial price movement on the NasdaqGS over the last few months, increasing to $4.35 at one point, and dropping to the lows of $3.75. 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 Central European Media Enterprises’s current trading price of $3.85 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 Central European Media Enterprises’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Central European Media Enterprises
Is Central European Media Enterprises still cheap?
According to my valuation model, Central European Media Enterprises seems to be fairly priced at around 15.57% below my intrinsic value, which means if you buy Central European Media Enterprises today, you’d be paying a fair price for it. And if you believe the company’s true value is $4.56, then there isn’t much room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Central European Media Enterprises’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What kind of growth will Central European Media Enterprises 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. With profit expected to more than double over the next couple of years, the future seems bright for Central European Media Enterprises. 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? It seems like the market has already priced in CETV’s positive outlook, 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 confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on CETV, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which 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 Central European Media Enterprises. You can find everything you need to know about Central European Media Enterprises in the latest infographic research report. If you are no longer interested in Central European Media Enterprises, 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.