Is It Time To Consider Buying LiveChat Software S.A. (WSE:LVC)?

LiveChat Software S.A. (WSE:LVC), might not be a large cap stock, but it saw a decent share price growth in the teens level on the WSE over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine LiveChat Software’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for LiveChat Software

What's the opportunity in LiveChat Software?

According to my valuation model, the stock is currently overvalued by about 38%, trading at zł97.00 compared to my intrinsic value of PLN70.13. This means that the buying opportunity has probably disappeared for now. Furthermore, LiveChat Software’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

Can we expect growth from LiveChat Software?

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. LiveChat Software's earnings over the next few years are expected to increase by 74%, 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 well and truly priced in LVC’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe LVC 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 an eye on LVC for a while, 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 LVC, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about LiveChat Software as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 2 warning signs for LiveChat Software (of which 1 shouldn't be ignored!) 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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