Allied Motion Technologies Inc. (NASDAQ:AMOT), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQGM, rising to highs of US$42.59 and falling to the lows of US$29.17. 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 Allied Motion Technologies' current trading price of US$29.84 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 Allied Motion Technologies’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 Allied Motion Technologies

What's the opportunity in Allied Motion Technologies?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Allied Motion Technologies’s ratio of 19.03x is trading slightly below its industry peers’ ratio of 21.15x, which means if you buy Allied Motion Technologies today, you’d be paying a reasonable price for it. And if you believe Allied Motion Technologies should be trading in this range, then there isn’t much room for the share price to grow beyond the levels of other industry peers over the long-term. Although, there may be an opportunity to buy in the future. This is because Allied Motion Technologies’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 Allied Motion Technologies 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. With profit expected to grow by a double-digit 16% over the next couple of years, the outlook is positive for Allied Motion Technologies. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.