Is There Now An Opportunity In Audinate Group Limited (ASX:AD8)?

Audinate Group Limited (ASX:AD8), might not be a large cap stock, but it saw significant share price movement during recent months on the ASX, rising to highs of AU$10.57 and falling to the lows of AU$8.67. 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 Audinate Group's current trading price of AU$8.67 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 Audinate Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Audinate Group

What's the opportunity in Audinate Group?

According to my valuation model, Audinate Group seems to be fairly priced at around 19% below my intrinsic value, which means if you buy Audinate Group today, you’d be paying a fair price for it. And if you believe that the stock is really worth A$10.65, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that Audinate Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Audinate Group?

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 an extremely negative double-digit change in profit expected next year, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Audinate Group, at least in the near future.

What this means for you:

Are you a shareholder? Currently, AD8 appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on AD8 for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on AD8 should the price fluctuate below its true value.

Diving deeper into the forecasts for Audinate Group mentioned earlier will help you understand how analysts view the stock going forward. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Audinate Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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