While Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) might not have the largest market cap around , it saw significant share price movement during recent months on the NASDAQCM, rising to highs of US$24.05 and falling to the lows of US$15.65. 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 Grid Dynamics Holdings' current trading price of US$15.65 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 Grid Dynamics Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

What's The Opportunity In Grid Dynamics Holdings?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 16% below our intrinsic value, which means if you buy Grid Dynamics Holdings today, you’d be paying a fair price for it. And if you believe the company’s true value is $18.54, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Grid Dynamics Holdings’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Check out our latest analysis for Grid Dynamics Holdings

What kind of growth will Grid Dynamics Holdings 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. 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. Grid Dynamics Holdings' earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in GDYN’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on GDYN, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about Grid Dynamics Holdings as a business, it's important to be aware of any risks it's facing. For example - Grid Dynamics Holdings has 2 warning signs we think you should be aware of.

If you are no longer interested in Grid Dynamics Holdings, 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.