At UK£4.05, Is It Time To Put Team17 Group plc (LON:TM17) On Your Watch List?

Team17 Group plc (LON:TM17), is not the largest company out there, but it saw significant share price movement during recent months on the AIM, rising to highs of UK£4.84 and falling to the lows of UK£3.90. 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 Team17 Group's current trading price of UK£4.05 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 Team17 Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Team17 Group

What's The Opportunity In Team17 Group?

According to my valuation model, Team17 Group seems to be fairly priced at around 14% below my intrinsic value, which means if you buy Team17 Group today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth £4.70, then there’s not much of an upside to gain from mispricing. In addition to this, Team17 Group has a low beta, which suggests its share price is less volatile than the wider market.

What Kind Of Returns Can We Expect From Team17 Group In The Future?

Valuation is only one aspect of forming your investment views on Team17 Group. Another thing to consider is whether it is actually a high-quality company. The best type of investment is always in a great company, producing robust returns at a cheap price. We can determine the quality of a stock many ways; one way is to look at how much return it generates relative to the money we’ve invested in the stock. Team17 Group is expected to return 15% of your investment in the next couple of years if you buy the stock today. This is a relatively good return on your investment which builds up the case for owning the stock.

What This Means For You

Are you a shareholder? It seems like the market has already priced in TM17’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of the company’s management team. Has anything significant changed since the last time you examined TM17? And 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 TM17 for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the high returns are encouraging for TM17, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Team17 Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.