When Should You Buy Amplitude, Inc. (NASDAQ:AMPL)?

While Amplitude, Inc. (NASDAQ:AMPL) might not have the largest market cap around , it saw significant share price movement during recent months on the NASDAQCM, rising to highs of US$14.29 and falling to the lows of US$9.63. 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 Amplitude's current trading price of US$9.63 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 Amplitude’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Amplitude

Is Amplitude Still Cheap?

According to our valuation model, Amplitude seems to be fairly priced at around 15% below our intrinsic value, which means if you buy Amplitude today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $11.34, then there isn’t much room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Amplitude’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from Amplitude?

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. Amplitude's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? AMPL’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 financial strength of the company. 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 an eye on AMPL, 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about Amplitude as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 2 warning signs for Amplitude and you'll want to know about them.

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

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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.