Is It Time To Consider Buying Pushpay Holdings Limited (NZSE:PPH)?

Pushpay Holdings Limited (NZSE:PPH), is not the largest company out there, but it received a lot of attention from a substantial price movement on the NZSE over the last few months, increasing to NZ$1.82 at one point, and dropping to the lows of NZ$1.58. 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 Pushpay Holdings' current trading price of NZ$1.68 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 Pushpay Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Pushpay Holdings

What is Pushpay Holdings worth?

According to my valuation model, Pushpay Holdings seems to be fairly priced at around 15% below my intrinsic value, which means if you buy Pushpay Holdings today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth NZ$1.97, then there’s not much of an upside to gain from mispricing. What's more, Pushpay Holdings’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of Pushpay Holdings look like?

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. Pushpay Holdings' earnings over the next few years are expected to increase by 96%, 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? PPH’s optimistic future growth appears to have been factored into the current share price, 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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on PPH, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Pushpay Holdings, and understanding it should be part of your investment process.

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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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