Is It Time To Consider Buying M.T.I Wireless Edge Ltd. (LON:MWE)?

M.T.I Wireless Edge Ltd. (LON:MWE), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the AIM. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. 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 examine M.T.I Wireless Edge’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for M.T.I Wireless Edge

What's The Opportunity In M.T.I Wireless Edge?

Good news, investors! M.T.I Wireless Edge is still a bargain right now. According to our valuation, the intrinsic value for the stock is £0.52, but it is currently trading at UK£0.40 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because M.T.I Wireless Edge’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of M.T.I Wireless Edge look like?

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. However, with a relatively muted profit growth of 6.2% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for M.T.I Wireless Edge, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since MWE 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 financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on MWE 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 MWE. 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.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example - M.T.I Wireless Edge has 2 warning signs we think you should be aware of.

If you are no longer interested in M.T.I Wireless Edge, 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.