Qiwi plc (NASDAQ:QIWI), a it company based in Cyprus, received a lot of attention from a substantial price movement on the NasdaqGS over the last few months, increasing to $19.15 at one point, and dropping to the lows of $15.72. 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 Qiwi’s current trading price of $16.8 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 Qiwi’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for Qiwi
What’s the opportunity in Qiwi?
According to my valuation model, Qiwi seems to be fairly priced at around 10.03% below my intrinsic value, which means if you buy Qiwi today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $18.67, 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 Qiwi’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 does the future of Qiwi look like?
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. Qiwi’s earnings over the next few years are expected to increase by 90.84%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in QIWI’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 tabs on QIWI, 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 Qiwi. You can find everything you need to know about Qiwi in the latest infographic research report. If you are no longer interested in Qiwi, 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.