Is It Time To Consider Buying Smaregi, Inc. (TSE:4431)?

While Smaregi, Inc. (TSE:4431) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the TSE over the last few months, increasing to JP¥2,499 at one point, and dropping to the lows of JP¥1,868. 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 Smaregi's current trading price of JP¥1,879 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 Smaregi’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 Smaregi

Is Smaregi Still Cheap?

According to our valuation model, Smaregi seems to be fairly priced at around 7.05% above our intrinsic value, which means if you buy Smaregi today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is ¥1755.28, there’s only an insignificant downside when the price falls to its real value. What's more, Smaregi’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Smaregi?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Smaregi's earnings over the next few years are expected to increase by 35%, 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 4431’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 confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on 4431, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, 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. Every company has risks, and we've spotted 1 warning sign for Smaregi you should know about.

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

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

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