WildBrain Ltd. (TSE:WILD), is not the largest company out there, but it saw significant share price movement during recent months on the TSX, rising to highs of CA$1.93 and falling to the lows of CA$1.41. 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 WildBrain's current trading price of CA$1.45 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 WildBrain’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 WildBrain

Is WildBrain Still Cheap?

According to my valuation model, WildBrain seems to be fairly priced at around 15% below my intrinsic value, which means if you buy WildBrain today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth CA$1.70, then there’s not much of an upside to gain from mispricing. What's more, WildBrain’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will WildBrain 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 revenues expected to grow by a double-digit 10% over the next couple of years, the outlook is positive for WildBrain. If the level of expenses is able to be maintained, 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 WILD’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 WILD, 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing WildBrain at this point in time. For example - WildBrain has 1 warning sign we think you should be aware of.

If you are no longer interested in WildBrain, 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.