Symbility Solutions Inc (CVE:SY), a software company based in Canada, received a lot of attention from a substantial price increase on the TSXV over the last few months. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Symbility Solutions’s outlook and value based on the most recent financial data to see if the opportunity still exists. View out our latest analysis for Symbility Solutions
What’s the opportunity in Symbility Solutions?According to my valuation model, the stock is currently overvalued by about 42.2%, trading at CA$0.56 compared to my intrinsic value of CA$0.39. Not the best news for investors looking to buy! In addition to this, it seems like Symbility Solutions’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will Symbility Solutions generate?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. 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. Symbility Solutions’s revenue growth are expected to be in the teens in the upcoming year, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? SY’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe SY 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 tabs on SY for some time, 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 positive outlook is encouraging for SY, 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 Symbility Solutions. You can find everything you need to know about Symbility Solutions in the latest infographic research report. If you are no longer interested in Symbility Solutions, you can use our free platform to see my list of over 50 other stocks with a high growth potential.