Is It Time to Consider Buying GDEV Inc. (NASDAQ:GDEV)?

While GDEV Inc. (NASDAQ:GDEV) may not have the largest market cap, it has seen its stock price increase 26% over the past two months on the NASDAQGM. Shareholders may appreciate the recent price rally, but the company still has a ways to go before it hits its yearly highs again. Smaller caps, which are less covered, tend to present more opportunities for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a discount to its true value? Let’s take a closer look at GDEV’s valuation and outlook to determine if there is still a bargain opportunity.

Check out our latest analysis for GDEV

What is the opportunity in GDEV?

Good news for investors! GDEV remains a bargain right now, according to our price multiple model, which compares the company’s price-to-earnings ratio to the industry average. We used the price-to-earnings ratio in this case because there isn’t enough visibility to forecast its cash flows. The stock’s 9.82x is currently well below the industry average of 14.37x, meaning it’s trading at a discount to its peers. Another thing to keep in mind is that GDEV’s share price is fairly stable relative to the rest of the market, as indicated by its low beta. This means that if you think the stock’s current price should get closer to its industry peers, a low beta could suggest it’s unlikely to get there anytime soon, and once it does, it could be hard to get back into an attractive buying range.

Can we expect growth from GDEV?

Investors looking for growth in their portfolio may want to consider a company’s prospects before buying its shares. While value investors argue that it’s the intrinsic value relative to the price that matters most, a more compelling investment thesis would be high growth potential at a cheap price. However, with an extremely negative double-digit change in earnings expected over the next two years, near-term growth is certainly not a determining factor in a buying decision. It seems that a lot of uncertainty is on the cards for GDEV, at least in the near future.

What this means for you

Are you a shareholder? Although GDEV is currently trading below the industry’s price-to-earnings ratio, the unfavorable outlook for negative growth carries some risk. We recommend that you consider whether you want to increase your portfolio’s exposure to GDEV or whether diversifying into another stock might be a better decision for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on GDEV for a while but are hesitant to take the plunge, we recommend taking a closer look at the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks associated with negative growth prospects going forward.

If you want to learn more about GDEV as a company, it is important to be aware of the risks it faces. To this end, you should learn about the 3 warning signs we have identified with GDEV (including 2 which are worrying).

If you are no longer interested in GDEV, you can use our free platform to view our list of over 50 other stocks with high growth potential.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to constitute financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. Our goal is to provide you with focused, long-term analysis based on fundamental data. Please note that our analysis may not factor in the latest price-sensitive company announcements or qualitative information. Simply Wall St has no position in any of the stocks mentioned.

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