Is Now The Time To Look At Buying Sapiens International Corporation N.V. (NASDAQ:SPNS)?

By
Simply Wall St
Published
March 15, 2022
NasdaqGS:SPNS
Source: Shutterstock

Sapiens International Corporation N.V. (NASDAQ:SPNS), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$36.55 at one point, and dropping to the lows of US$24.71. 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 Sapiens International's current trading price of US$24.71 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 Sapiens International’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 Sapiens International

What is Sapiens International worth?

Good news, investors! Sapiens International is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $37.99, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Sapiens International’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Sapiens International?

earnings-and-revenue-growth
NasdaqGS:SPNS Earnings and Revenue Growth March 15th 2022

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. 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. Sapiens International's earnings over the next few years are expected to increase by 50%, 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? Since SPNS is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on SPNS for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy SPNS. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Every company has risks, and we've spotted 2 warning signs for Sapiens International you should know about.

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

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