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While Nerdy, Inc. (NYSE:NRDY) might not have the largest market cap around , it led the NYSE gainers with a relatively large price hike in the past couple of weeks. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Nerdy’s outlook and value based on the most recent financial data to see if the opportunity still exists.
View our latest analysis for Nerdy
Is Nerdy Still Cheap?
According to our valuation model, Nerdy seems to be fairly priced at around 6.1% below our intrinsic value, which means if you buy Nerdy today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $1.74, 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 Nerdy’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 does the future of Nerdy 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. However, with a relatively muted profit growth of 5.8% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Nerdy, at least in the short term.
What This Means For You
Are you a shareholder? NRDY’s 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 tabs on NRDY, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.