While dotdigital Group Plc (LON:DOTD) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the AIM over the last few months, increasing to UK£0.74 at one point, and dropping to the lows of UK£0.64. 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 dotdigital Group’s current trading price of UK£0.68 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 dotdigital Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Great news for investors – dotdigital Group is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is £1.00, but it is currently trading at UK£0.68 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, dotdigital Group’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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.
View our latest analysis for dotdigital Group
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 37% over the next couple of years, the future seems bright for dotdigital Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
Are you a shareholder? Since DOTD is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic 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 DOTD for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy DOTD. 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 investment decision.