While Goodtech ASA (OB:GOD) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the OB over the last few months, increasing to kr15.50 at one point, and dropping to the lows of kr10.80. 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 Goodtech's current trading price of kr11.30 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 Goodtech’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Goodtech
Is Goodtech still cheap?
Good news, investors! Goodtech is still a bargain right now. According to my valuation, the intrinsic value for the stock is NOK15.44, but it is currently trading at kr11.30 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 Goodtech’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.
Can we expect growth from Goodtech?
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. With revenues expected to grow by a double-digit 14% over the next couple of years, the outlook is positive for Goodtech. 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? Since GOD is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on GOD for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy GOD. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.
If you'd like to know more about Goodtech as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 3 warning signs for Goodtech you should know about.
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This article by Simply Wall St is general in nature. 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.
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About OB:GOD
Goodtech
Provides management systems, digitization, and production optimization solutions for industrial and manufacturing companies in Norway, Sweden, Finland, Europe, and internationally.
Flawless balance sheet and undervalued.
