SoundThinking, Inc. (NASDAQ:SSTI), is not the largest company out there, but it saw a significant share price rise of 21% in the past couple of months on the NASDAQCM. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at SoundThinking’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for SoundThinking

Is SoundThinking Still Cheap?

Great news for investors – SoundThinking is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $22.60, but it is currently trading at US$13.56 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 SoundThinking’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.

What kind of growth will SoundThinking generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Though in the case of SoundThinking, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Although SSTI is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to SSTI, 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 tabs on SSTI for some time, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you'd like to know more about SoundThinking as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 2 warning signs for SoundThinking you should be aware of.

If you are no longer interested in SoundThinking, 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.