What Does Zensar Technologies Limited's (NSE:ZENSARTECH) Share Price Indicate?

While Zensar Technologies Limited (NSE:ZENSARTECH) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the NSEI over the last few months, increasing to ₹533 at one point, and dropping to the lows of ₹361. 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 Zensar Technologies' current trading price of ₹362 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 Zensar Technologies’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 Zensar Technologies

What's the opportunity in Zensar Technologies?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 0.4% below my intrinsic value, which means if you buy Zensar Technologies today, you’d be paying a fair price for it. And if you believe the company’s true value is ₹363.25, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Zensar Technologies’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Zensar Technologies 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. Zensar Technologies' earnings over the next few years are expected to increase by 49%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has already priced in ZENSARTECH’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 its management team. 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 an eye on ZENSARTECH, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, 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.

If you want to dive deeper into Zensar Technologies, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Zensar Technologies has 2 warning signs and it would be unwise to ignore these.

If you are no longer interested in Zensar Technologies, 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.