While Objective Corporation Limited (ASX:OCL) might not have the largest market cap around , it maintained its current share price over the past couple of month on the ASX, with a relatively tight range of AU$11.75 to AU$12.68. However, does this price actually reflect the true value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Objective’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 Objective

What Is Objective Worth?

Great news for investors – Objective is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Objective’s ratio of 42.78x is below its peer average of 61.72x, which indicates the stock is trading at a lower price compared to the Software industry. What’s more interesting is that, Objective’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move closer to its industry peers, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What does the future of Objective 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. Objective's earnings over the next few years are expected to increase by 55%, 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? Since OCL is currently below the industry PE ratio, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. 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 OCL for a while, now might be the time to enter the stock. Its prosperous future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy OCL. 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.