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While PlaySide Studios Limited (ASX:PLY) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the ASX over the last few months, increasing to AU$0.71 at one point, and dropping to the lows of AU$0.41. 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 PlaySide Studios' current trading price of AU$0.41 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 PlaySide Studios’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 PlaySide Studios
What Is PlaySide Studios Worth?
According to our valuation model, PlaySide Studios seems to be fairly priced at around 11% below our intrinsic value, which means if you buy PlaySide Studios today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth A$0.47, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because PlaySide Studios’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 PlaySide Studios generate?
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 over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for PlaySide Studios, at least in the near future.
What This Means For You
Are you a shareholder? Currently, PLY 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 reduce the risk in your portfolio. Is your current exposure to the stock beneficial 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.