What Does Great Canadian Gaming Corporation's (TSE:GC) Share Price Indicate?

Great Canadian Gaming Corporation (TSX:GC), a hospitality company based in Canada, saw significant share price volatility over the past couple of months on the TSX, rising to the highs of CA$38.15 and falling to the lows of CA$32.49. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Great Canadian Gaming's current trading price of CA$33.78 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 Great Canadian Gaming’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 Great Canadian Gaming

What's the opportunity in Great Canadian Gaming?

According to my valuation model, Great Canadian Gaming seems to be fairly priced at around 18% above my intrinsic value, which means if you buy Great Canadian Gaming today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is CA$28.71, there’s only an insignificant downside when the price falls to its real value. Furthermore, Great Canadian Gaming’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.

Can we expect growth from Great Canadian Gaming?

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. With profit expected to grow by 50.42% over the next year, the near-term future seems bright for Great Canadian Gaming. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? GC’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on GC, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, 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 Great Canadian Gaming. You can find everything you need to know about Great Canadian Gaming in the latest infographic research report. If you are no longer interested in Great Canadian Gaming, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.