At JP¥4,515, Is Tera Probe, Inc. (TSE:6627) Worth Looking At Closely?

Tera Probe, Inc. (TSE:6627), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the TSE over the last few months, increasing to JP¥5,920 at one point, and dropping to the lows of JP¥4,380. 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 Tera Probe's current trading price of JP¥4,515 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 Tera Probe’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Tera Probe

What's The Opportunity In Tera Probe?

Good news, investors! Tera Probe is still a bargain right now. According to our valuation, the intrinsic value for the stock is ¥5925.91, but it is currently trading at JP¥4,515 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 Tera Probe’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 Tera Probe 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. 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 negative profit growth of -11% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Tera Probe. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although 6627 is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. We recommend you think about whether you want to increase your portfolio exposure to 6627, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on 6627 for a while, but hesitant on making the leap, we recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

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. To that end, you should learn about the 3 warning signs we've spotted with Tera Probe (including 1 which shouldn't be ignored).

If you are no longer interested in Tera Probe, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com