Should You Investigate Qt Group Oyj (HEL:QTCOM) At €14.35?

Qt Group Oyj (HEL:QTCOM), which is in the software business, and is based in Finland, saw a decent share price growth in the teens level on the HLSE over the last few months. 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 Qt Group Oyj’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Qt Group Oyj

What is Qt Group Oyj worth?

Qt Group Oyj appears to be overvalued by 28% at the moment, based on my discounted cash flow valuation. The stock is currently priced at €14.35 on the market compared to my intrinsic value of €11.21. This means that the opportunity to buy Qt Group Oyj at a good price has disappeared! Another thing to keep in mind is that Qt Group Oyj’s share price is quite stable relative to the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

Can we expect growth from Qt Group Oyj?

HLSE:QTCOM Past and Future Earnings, October 25th 2019
HLSE:QTCOM Past and Future Earnings, October 25th 2019

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. In Qt Group Oyj’s case, its revenues over the next few years are expected to grow by 85%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in QTCOM’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe QTCOM should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on QTCOM for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for QTCOM, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Qt Group Oyj. You can find everything you need to know about Qt Group Oyj in the latest infographic research report. If you are no longer interested in Qt Group Oyj, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.