Admicom Oyj (HEL:ADMCM), which is in the software business, and is based in Finland, saw a significant share price rise of over 20% in the past couple of months on the HLSE. 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 Admicom Oyj’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Admicom Oyj

Is Admicom Oyj still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 5.77% above my intrinsic value, which means if you buy Admicom Oyj today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is €71.10, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Admicom Oyj’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.

Can we expect growth from Admicom Oyj?

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. 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. Admicom Oyj’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? ADMCM’s optimistic 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 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 an eye on ADMCM, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.