Rovio Entertainment Oyj (HEL:ROVIO), which is in the entertainment business, and is based in Finland, saw a double-digit share price rise of over 10% in the past couple of months on the HLSE. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at Rovio Entertainment Oyj’s outlook and value based on the most recent financial data to see if the opportunity still exists.
See our latest analysis for Rovio Entertainment Oyj
What’s the opportunity in Rovio Entertainment Oyj?
Great news for investors – Rovio Entertainment Oyj is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is €7.88, but it is currently trading at €4.57 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 Rovio Entertainment Oyj’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 Rovio Entertainment Oyj 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 grow by 63% over the next couple of years, the future seems bright for Rovio Entertainment Oyj. 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 ROVIO 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 financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on ROVIO for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ROVIO. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Rovio Entertainment Oyj. You can find everything you need to know about Rovio Entertainment Oyj in the latest infographic research report. If you are no longer interested in Rovio Entertainment Oyj, you can use our free platform to see my list of over 50 other stocks with a high growth potential.