Modern Times Group Mtg AB (STO:MTG B), might not be a large cap stock, but it saw significant share price movement during recent months on the OM, rising to highs of kr144 and falling to the lows of kr114. 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 Modern Times Group Mtg's current trading price of kr115 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 Modern Times Group Mtg’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 Modern Times Group Mtg
Is Modern Times Group Mtg still cheap?
According to my valuation model, Modern Times Group Mtg seems to be fairly priced at around 15% below my intrinsic value, which means if you buy Modern Times Group Mtg today, you’d be paying a fair price for it. And if you believe the company’s true value is SEK134.74, then there’s not much of an upside to gain from mispricing. In addition to this, Modern Times Group Mtg has a low beta, which suggests its share price is less volatile than the wider market.
What kind of growth will Modern Times Group Mtg generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. In Modern Times Group Mtg's case, its revenues over the next few years are expected to grow by 69%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? MTG B’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 MTG B, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect 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.
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. For instance, we've identified 2 warning signs for Modern Times Group Mtg (1 is a bit concerning) you should be familiar with.
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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 OM:MTG B
Modern Times Group MTG
Through its subsidiaries, provides game franchise services in Sweden, the United Kingdom, Germany, rest of Europe, Singapore, India, the United States, and New Zealand.
Excellent balance sheet with reasonable growth potential.
