At US$1.27, Is Kaleyra, Inc. (NYSE:KLR) Worth Looking At Closely?

Kaleyra, Inc. (NYSE:KLR), might not be a large cap stock, but it led the NYSE gainers with a relatively large price hike in the past couple of weeks. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine Kaleyra’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Kaleyra

Is Kaleyra Still Cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 3.8% below my intrinsic value, which means if you buy Kaleyra today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $1.32, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Kaleyra’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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 Kaleyra generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Kaleyra's earnings over the next few years are expected to increase by 66%, 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? It seems like the market has already priced in KLR’s positive outlook, 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 tabs on KLR, 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 diving deeper into 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 Kaleyra as a business, it's important to be aware of any risks it's facing. For example, Kaleyra has 4 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

If you are no longer interested in Kaleyra, 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.