SKY Network Television Limited (NZSE:SKT), might not be a large cap stock, but it saw a significant share price rise of over 20% in the past couple of months on the NZSE. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine SKY Network Television’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
See our latest analysis for SKY Network Television
What is SKY Network Television worth?
Good news, investors! SKY Network Television is still a bargain right now. My valuation model shows that the intrinsic value for the stock is NZ$0.29, but it is currently trading at NZ$0.21 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that SKY Network Television’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
Can we expect growth from SKY Network Television?
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. Though in the case of SKY Network Television, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? Although SKT is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio exposure to SKT, 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 SKT for a while, but hesitant on making the leap, I 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. While conducting our analysis, we found that SKY Network Television has 1 warning sign and it would be unwise to ignore it.
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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.
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About NZSE:SKT
SKY Network Television
An entertainment company, provides sport and entertainment media services, and telecommunications services in New Zealand and internationally.
Flawless balance sheet, undervalued and pays a dividend.
