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SiteMinder Limited (ASX:SDR), is not the largest company out there, but it saw significant share price movement during recent months on the ASX, rising to highs of AU$6.88 and falling to the lows of AU$5.48. 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 SiteMinder's current trading price of AU$5.84 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 SiteMinder’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 SiteMinder
What Is SiteMinder Worth?
According to our valuation model, SiteMinder seems to be fairly priced at around 16% below our intrinsic value, which means if you buy SiteMinder today, you’d be paying a fair price for it. And if you believe that the stock is really worth A$6.93, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since SiteMinder’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from SiteMinder?
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. 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. With profit expected to grow by 62% over the next year, the near-term future seems bright for SiteMinder. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? SDR’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 conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on SDR, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.