Frontier Digital Ventures Limited (ASX:FDV), might not be a large cap stock, but it saw significant share price movement during recent months on the ASX, rising to highs of AU$0.56 and falling to the lows of AU$0.40. 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 Frontier Digital Ventures' current trading price of AU$0.42 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 Frontier Digital Ventures’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Frontier Digital Ventures

What's The Opportunity In Frontier Digital Ventures?

According to our valuation model, the stock is currently overvalued by about 36%, trading at AU$0.42 compared to our intrinsic value of A$0.31. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Since Frontier Digital Ventures’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.

Can we expect growth from Frontier Digital Ventures?

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. 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 grow by 47% over the next year, the near-term future seems bright for Frontier Digital Ventures. 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? FDV’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe FDV should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.