Is Now The Time To Look At Buying Mondo TV S.p.A. (BIT:MTV)?

Mondo TV S.p.A. (BIT:MTV), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the BIT. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at Mondo TV’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Mondo TV

Is Mondo TV Still Cheap?

According to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 5.9x is currently trading slightly below its industry peers’ ratio of 8.79x, which means if you buy Mondo TV today, you’d be paying a decent price for it. And if you believe that Mondo TV should be trading at this level in the long run, then there’s not much of an upside to gain over and above other industry peers. So, is there another chance to buy low in the future? Given that Mondo TV’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Mondo TV look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 revenue growth of 4.0% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Mondo TV, at least in the short term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in MTV’s growth outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at MTV? Will you have enough conviction to buy should the price fluctuate below the the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on MTV, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive growth outlook may mean it’s worth diving deeper into other factors in order to take advantage of the next price drop.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. In terms of investment risks, we've identified 2 warning signs with Mondo TV, and understanding these should be part of your investment process.

If you are no longer interested in Mondo TV, 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.