Yahoo Finance At US$11.23, Is Amplitude, Inc. (NASDAQ:AMPL) Worth Looking At Closely?
Amplitude, Inc. (NASDAQ:AMPL), is not the largest company out there, but it received a lot of attention from a substantial price movement on the NASDAQCM over the last few months, increasing to US$14.29 at one point, and dropping to the lows of US$10.77. 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 Amplitude's current trading price of US$11.23 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 Amplitude’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 Amplitude
What's The Opportunity In Amplitude?
According to our valuation model, Amplitude seems to be fairly priced at around 17.79% above our intrinsic value, which means if you buy Amplitude today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $9.53, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Amplitude’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Amplitude generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to grow by a double-digit 18% over the next couple of years, the outlook is positive for Amplitude. 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 AMPL’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 track record of its management team. 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 an eye on AMPL, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect 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 want to dive deeper into Amplitude, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 2 warning signs for Amplitude you should know about.
If you are no longer interested in Amplitude, 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.
