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Jumbo Interactive Limited (ASX:JIN), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the ASX over the last few months, increasing to AU$15.99 at one point, and dropping to the lows of AU$12.52. 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 Jumbo Interactive's current trading price of AU$13.60 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 Jumbo Interactive’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 Jumbo Interactive
What's The Opportunity In Jumbo Interactive?
Great news for investors – Jumbo Interactive is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is A$21.88, but it is currently trading at AU$13.60 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Jumbo Interactive’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 Jumbo Interactive 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. With profit expected to grow by 23% over the next couple of years, the future seems bright for Jumbo Interactive. 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? Since JIN is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on JIN for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy JIN. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.