Accel Entertainment, Inc. (NYSE:ACEL), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$12.47 at one point, and dropping to the lows of US$10.00. 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 Accel Entertainment's current trading price of US$10.00 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 Accel Entertainment’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 Accel Entertainment
What Is Accel Entertainment Worth?
The stock is currently trading at US$10.00 on the share market, which means it is overvalued by 23% compared to our intrinsic value of $8.10. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Since Accel Entertainment’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.
What kind of growth will Accel Entertainment 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. Accel Entertainment's earnings over the next few years are expected to increase by 73%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? It seems like the market has well and truly priced in ACEL’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe ACEL 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.
Are you a potential investor? If you’ve been keeping an eye on ACEL for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for ACEL, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
If you want to dive deeper into Accel Entertainment, you'd also look into what risks it is currently facing. For example - Accel Entertainment has 1 warning sign we think you should be aware of.
If you are no longer interested in Accel Entertainment, 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.