Why Eguana Technologies Inc. (CVE:EGT) Could Be Worth Watching
Eguana Technologies Inc. (CVE:EGT), is not the largest company out there, but it received a lot of attention from a substantial price movement on the TSXV over the last few months, increasing to CA$0.17 at one point, and dropping to the lows of CA$0.05. 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 Eguana Technologies' current trading price of CA$0.055 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 Eguana Technologies’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 Eguana Technologies
Is Eguana Technologies Still Cheap?
According to my valuation model, Eguana Technologies seems to be fairly priced at around 19.25% above my intrinsic value, which means if you buy Eguana Technologies today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth CA$0.05, then there isn’t really any room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Eguana Technologies’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from Eguana Technologies?
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. 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. Though in the case of Eguana Technologies, it is expected to deliver a relatively unexciting top-line growth of 9.7% over the next year, 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? EGT’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 financial strength of the company. 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 EGT, 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.
So while earnings quality is important, it's equally important to consider the risks facing Eguana Technologies at this point in time. For instance, we've identified 6 warning signs for Eguana Technologies (3 make us uncomfortable) you should be familiar with.
If you are no longer interested in Eguana Technologies, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
