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CI&T Inc. (NYSE:CINT), is not the largest company out there, but it saw significant share price movement during recent months on the NYSE, rising to highs of US$7.64 and falling to the lows of US$5.66. 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 CI&T's current trading price of US$6.09 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 CI&T’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What's The Opportunity In CI&T?
The share price seems sensible at the moment according to our price multiple model, where we compare 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 CI&T’s ratio of 28.91x is trading slightly below its industry peers’ ratio of 35.56x, which means if you buy CI&T today, you’d be paying a decent price for it. And if you believe that CI&T should be trading at this level in the long run, then there’s not much of an upside to gain over and above other industry peers. Is there another opportunity to buy low in the future? Since CI&T’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.
Check out our latest analysis for CI&T
What does the future of CI&T look like?
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. With profit expected to more than double over the next couple of years, the future seems bright for CI&T. 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? CINT’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. 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 CINT? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?