While Serko Limited (NZSE:SKO) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the NZSE. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. 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? Today we will analyse the most recent data on Serko’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Serko

Is Serko Still Cheap?

Great news for investors – Serko is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is NZ$5.56, but it is currently trading at NZ$3.54 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Serko’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What does the future of Serko look like?

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 75% over the next year, the near-term future seems bright for Serko. 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? Since SKO is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic 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 SKO for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy SKO. 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.