Is Everysport Media Group AB (NGM:EVERY) Potentially Undervalued?

By
Simply Wall St
Published
November 12, 2021
NGM:EVERY
Source: Shutterstock

Everysport Media Group AB (NGM:EVERY), is not the largest company out there, but it led the NGM gainers with a relatively large price hike in the past couple of weeks. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Today I will analyse the most recent data on Everysport Media Group’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Everysport Media Group

What's the opportunity in Everysport Media Group?

Everysport Media Group is currently expensive based on my price multiple model, where I look at the company's price-to-earnings ratio in comparison to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 62x is currently well-above the industry average of 53.94x, meaning that it is trading at a more expensive price relative to its peers. But, is there another opportunity to buy low in the future? Since Everysport Media Group’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Everysport Media Group generate?

earnings-and-revenue-growth
NGM:EVERY Earnings and Revenue Growth November 13th 2021

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. With profit expected to more than double over the next couple of years, the future seems bright for Everysport Media Group. 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 EVERY’s positive outlook, with shares trading above industry price multiples. At this current price, shareholders may be asking a different question – should I sell? If you believe EVERY should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio 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 EVERY for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for EVERY, 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. For example - Everysport Media Group has 2 warning signs we think you should be aware of.

If you are no longer interested in Everysport Media Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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