Should You Investigate MTN Group Limited (JSE:MTN) At R144?

Let's talk about the popular MTN Group Limited (JSE:MTN). The company's shares saw significant share price movement during recent months on the JSE, rising to highs of R175 and falling to the lows of R132. 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 MTN Group's current trading price of R144 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at MTN Group’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 MTN Group

Is MTN Group still cheap?

According to my valuation model, MTN Group seems to be fairly priced at around 20% below my intrinsic value, which means if you buy MTN Group today, you’d be paying a fair price for it. And if you believe the company’s true value is ZAR179.26, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, MTN Group’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will MTN Group 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. With profit expected to more than double over the next couple of years, the future seems bright for MTN Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? It seems like the market has already priced in MTN’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 confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on MTN, 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.

It can be quite valuable to consider what analysts expect for MTN Group from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in MTN Group, 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.