Brightcove Inc. (NASDAQ:BCOV), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$7.47 and falling to the lows of US$5.92. 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 Brightcove's current trading price of US$5.95 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 Brightcove’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 Brightcove

Is Brightcove Still Cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 5.1% below my intrinsic value, which means if you buy Brightcove today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $6.27, then there’s not much of an upside to gain from mispricing. Furthermore, Brightcove’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Brightcove?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. However, with an extremely negative double-digit change in profit expected next year, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Brightcove, at least in the near future.

What This Means For You

Are you a shareholder? Currently, BCOV appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on BCOV for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on BCOV should the price fluctuate below its true value.