Shares of Global Eagle Entertainment Inc. (NASDAQ: ENT) are receiving a lot of investor interest as of late due to the stock’s 44.7% increase over the last month. Shareholders are now asking themselves whether the company’s current stock price is reflective of its true value or if shares have even further upside from here.
Let’s take a look at Global Eagle Entertainment’s value and outlook based on its most recent financial data to see if there are any catalysts for a price change.
What Is Global Eagle Entertainment Worth?
Welcoming news for investors, Global Eagle Entertainment is still trading at a fairly cheap price. According to our 8 valuation analyses, the intrinsic value for the stock is $4.07 per share and is currently trading at $2.88 in the market. This means that there is still an opportunity to buy now.
|Analysis||Model Fair Value||Upside (Downside)|
|10-yr DCF Revenue Exit||$4.70||63.1%|
|5-yr DCF Revenue Exit||$5.62||95.2%|
|Peer Revenue Multiples||$3.31||14.9%|
|10-yr DCF EBITDA Exit||$4.71||63.6%|
|5-yr DCF EBITDA Exit||$5.64||95.9%|
|Peer EBITDA Multiples||$3.16||9.7%|
|10-yr DCF Growth Exit||$2.74||-5.0%|
|5-yr DCF Growth Exit||$2.67||-7.2%|
Click on any of the analyses above to view the latest model with real-time data.
What’s more interesting is that Global Eagle Entertainment’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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.
How Much Growth Will Global Eagle Entertainment Generate?
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. 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.
source: finbox.io data explorer
Global Eagle Entertainment’s revenue growth is expected to average 1.9% over the next five fiscal years indicating that the core business could be in real trouble. In fact, this could imply that its products or services are losing demand and/or becoming irrelevant.
While many investors tend to categorize stocks as either value or growth plays, the most successful investors view growth in conjunction with a company’s value. Take legendary investor Peter Lynch for example, who is widely known for popularizing the term growth at a reasonable price (GARP).
GARP is a strategy that combines aspects of both growth and value investing techniques by finding high growth companies that don’t trade at overly high valuations. In the application of this strategy, Lynch achieved 29% annualized returns as the manager of Fidelity’s Magellan Fund from 1977 to 1990. Needless to say the importance of analyzing a company’s fair value in addition to its growth prospects.
Although Global Eagle Entertainment’s future growth is relatively low, the company’s stock still appears to be trading at a discount to its intrinsic value. Therefore, it may be a great time to purchase shares or add more to your existing holdings.
However, if you have not done so already, I highly recommend you complete your research on Global Eagle Entertainment by taking a look at the following:
Efficiency Metrics: fixed asset turnover is calculated by dividing revenue by average fixed assets. View Global Eagle Entertainment’s fixed asset turnover here.
Risk Metrics: how much interest coverage does Global Eagle Entertainment have? This is a ratio used to assess a firm’s ability to pay interest expenses based on operating profits (EBIT). View the company’s interest coverage here.
Valuation Metrics: what is Global Eagle Entertainment’s short ratio and how does it compare to its publicly traded peers? It represents the percentage of total shares outstanding that is being shorted. View the short ratio here.
As of this writing, I did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.