In This Article:
While SKY Network Television Limited (NZSE:SKT) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the NZSE over the last few months, increasing to NZ$2.83 at one point, and dropping to the lows of NZ$2.44. 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 SKY Network Television's current trading price of NZ$2.67 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 SKY Network Television’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for SKY Network Television
Is SKY Network Television Still Cheap?
Good news, investors! SKY Network Television is still a bargain right now according to our price multiple model, which compares 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 SKY Network Television’s ratio of 7.51x is below its peer average of 16.34x, which indicates the stock is trading at a lower price compared to the Media industry. SKY Network Television’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its industry peers, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What kind of growth will SKY Network Television 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 SKY Network Television, it is expected to deliver a relatively unexciting earnings growth of 5.3%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since SKT is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.