Is It Too Late To Buy Beasley Broadcast Group, Inc. (NASDAQ:BBGI) At Its May Price?

Beasley Broadcast Group, Inc. (NASDAQ:BBGI) closed yesterday at $3.64, which left some investors asking whether the high earnings potential can still be justified at this price. Let’s look into this by assessing BBGI's expected growth over the next few years.

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See our latest analysis for Beasley Broadcast Group

Where's the growth?

One reason why investors are attracted to BBGI is the high growth potential in the near future. Expectations from 2 analysts are extremely bullish with earnings per share estimated to surge from current levels of $0.401 to $0.681 over the next three years. This indicates an estimated earnings growth rate of 15% per year, on average, which signals a market-beating outlook in the upcoming years.

Is BBGI's share price justifiable by its earnings growth?

Beasley Broadcast Group is available at a price-to-earnings ratio of 9.07x, showing us it is undervalued relative to the current US market average of 17.41x , and undervalued based on its latest annual earnings update compared to the Media average of 16.7x .

Given that BBGI's price-to-earnings of 9.07x lies below the industry average, this already indicates that the company could be potentially undervalued. However, seeing as Beasley Broadcast Group is perceived as a high-growth stock, we must also account for its earnings growth, which is captured in the PEG ratio. A PE ratio of 9.07x and expected year-on-year earnings growth of 15% give Beasley Broadcast Group a very low PEG ratio of 0.59x. This tells us that when we include its growth in our analysis Beasley Broadcast Group's stock can be considered relatively cheap , based on its fundamentals.

What this means for you:

BBGI's current undervaluation could signal a potential buying opportunity to increase your exposure to the stock, or it you're a potential investor, now may be the right time to buy. However, basing your investment decision off one metric alone is certainly not sufficient. There are many things I have not taken into account in this article and the PEG ratio is very one-dimensional. If you have not done so already, I urge you to complete your research by taking a look at the following:

1. Financial Health: Are BBGI’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
2. Past Track Record: Has BBGI been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of BBGI's historicals for more clarity.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.