Is Now An Opportune Moment To Examine Rovio Entertainment Oyj (HEL:ROVIO)?

Rovio Entertainment Oyj (HEL:ROVIO), is not the largest company out there, but it received a lot of attention from a substantial price movement on the HLSE over the last few months, increasing to €7.30 at one point, and dropping to the lows of €6.20. 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 Rovio Entertainment Oyj's current trading price of €6.81 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 Rovio Entertainment Oyj’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 Rovio Entertainment Oyj

What is Rovio Entertainment Oyj worth?

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 €8.81, but it is currently trading at €6.81 on the share market, meaning that there is still an opportunity to buy now. Rovio Entertainment Oyj’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What kind of growth will Rovio Entertainment Oyj generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. However, with a relatively muted profit growth of 5.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Rovio Entertainment Oyj, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since ROVIO is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure 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 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 track record of its management team, in order to make a well-informed investment decision.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. While conducting our analysis, we found that Rovio Entertainment Oyj has 1 warning sign and it would be unwise to ignore it.

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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. 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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