While Envirosuite Limited (ASX:EVS) might not have the largest market cap around , it saw a significant share price rise of 100% in the past couple of months on the ASX. While good news for shareholders, the company has traded much higher in the past year. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Envirosuite’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Envirosuite

What's The Opportunity In Envirosuite?

Great news for investors – Envirosuite is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is A$0.12, but it is currently trading at AU$0.078 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Envirosuite’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from Envirosuite?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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 profit expected to grow by 85% over the next couple of years, the future seems bright for Envirosuite. 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? Since EVS is currently undervalued, 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 undervaluation.

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