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While DoubleDown Interactive Co., Ltd. (NASDAQ:DDI) might not have the largest market cap around , it saw a significant share price rise of 33% in the past couple of months on the NASDAQGS. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today we will analyse the most recent data on DoubleDown Interactive’s outlook and valuation to see if the opportunity still exists.
View our latest analysis for DoubleDown Interactive
What Is DoubleDown Interactive Worth?
Great news for investors – DoubleDown Interactive is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that DoubleDown Interactive’s ratio of 5.84x is below its peer average of 19x, which indicates the stock is trading at a lower price compared to the Entertainment industry. Another thing to keep in mind is that DoubleDown Interactive’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its industry peers, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
What kind of growth will DoubleDown Interactive 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. Though in the case of DoubleDown Interactive, it is expected to deliver a negative earnings growth of -2.5%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What This Means For You
Are you a shareholder? Although DDI is currently trading below the industry PE ratio, the adverse prospect of negative growth brings about some degree of risk. We recommend you think about whether you want to increase your portfolio exposure to DDI, or whether diversifying into another stock may be a better move for your total risk and return.