When Should You Buy Chips&Media, Inc. (KOSDAQ:094360)?

Chips&Media, Inc. (KOSDAQ:094360), is not the largest company out there, but it saw a significant share price rise of 32% in the past couple of months on the KOSDAQ. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. Less-covered, small caps tend to present 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? Today we will analyse the most recent data on Chips&Media’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Chips&Media

What Is Chips&Media Worth?

According to our valuation model, the stock is currently overvalued by about 25%, trading at ₩25,700 compared to our intrinsic value of ₩20603.78. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Given that Chips&Media’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Chips&Media?

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. With revenues expected to grow by a double-digit 27% over the next couple of years, the outlook is positive for Chips&Media. If the level of expenses is able to be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in A094360’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe A094360 should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on A094360 for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for A094360, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. At Simply Wall St, we found 2 warning signs for Chips&Media and we think they deserve your attention.

If you are no longer interested in Chips&Media, 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.