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At AU$0.72, Is It Time To Put Ainsworth Game Technology Limited (ASX:AGI) On Your Watch List?

Simply Wall St · 04/10 20:40

Ainsworth Game Technology Limited (ASX:AGI), might not be a large cap stock, but it saw significant share price movement during recent months on the ASX, rising to highs of AU$0.94 and falling to the lows of AU$0.69. 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 Ainsworth Game Technology's current trading price of AU$0.72 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 Ainsworth Game Technology’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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Is Ainsworth Game Technology Still Cheap?

Great news for investors – Ainsworth Game Technology 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 Ainsworth Game Technology’s ratio of 8x is below its peer average of 19.32x, which indicates the stock is trading at a lower price compared to the Hospitality industry. Another thing to keep in mind is that Ainsworth Game Technology’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.

Check out our latest analysis for Ainsworth Game Technology

What kind of growth will Ainsworth Game Technology generate?

earnings-and-revenue-growth
ASX:AGI Earnings and Revenue Growth April 10th 2025

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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Ainsworth Game Technology, at least in the near future.

What This Means For You

Are you a shareholder? Although AGI is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. We recommend you think about whether you want to increase your portfolio exposure to AGI, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on AGI for a while, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

So while earnings quality is important, it's equally important to consider the risks facing Ainsworth Game Technology at this point in time. You'd be interested to know, that we found 1 warning sign for Ainsworth Game Technology and you'll want to know about this.

If you are no longer interested in Ainsworth Game Technology, you can use our free platform to see our list of over 50 other stocks with a high growth potential.