While CoreCard Corporation (NYSE:CCRD) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the NYSE, rising to highs of US$25.67 and falling to the lows of US$19.68. 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 CoreCard's current trading price of US$20.40 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 CoreCard’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 CoreCard

What Is CoreCard Worth?

Great news for investors – CoreCard is still trading at a fairly cheap price according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 31.57x is currently well-below the industry average of 44.53x, meaning that it is trading at a cheaper price relative to its peers. Another thing to keep in mind is that CoreCard’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its industry peers, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What does the future of CoreCard look like?

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. However, with a relatively muted revenue growth of 7.4% expected in the upcoming year, short term growth doesn’t seem like a key driver for a buy decision for CoreCard.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since CCRD is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on CCRD for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CCRD. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed assessment.

So while earnings quality is important, it's equally important to consider the risks facing CoreCard at this point in time. While conducting our analysis, we found that CoreCard has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in CoreCard, 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.