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Genie Energy Ltd. (NYSE:GNE), which is in the electric utilities business, and is based in United States, received a lot of attention from a substantial price increase on the NYSE over the last few months. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at Genie Energy’s outlook and value based on the most recent financial data to see if the opportunity still exists.
What's the opportunity in Genie Energy?
Good news, investors! Genie Energy is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $17.06, but it is currently trading at US$9.94 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Genie Energy’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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.
What kind of growth will Genie Energy generate?
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. However, with a relatively muted profit growth of 7.4% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Genie Energy, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since GNE is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on GNE for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy GNE. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Genie Energy. You can find everything you need to know about Genie Energy in the latest infographic research report. If you are no longer interested in Genie Energy, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.