Cable One, Inc. (NYSE:CABO), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$419 at one point, and dropping to the lows of US$322. 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 Cable One's current trading price of US$345 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 Cable One’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Cable One

Is Cable One Still Cheap?

According to our valuation model, Cable One seems to be fairly priced at around 6.9% below our intrinsic value, which means if you buy Cable One today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $371.00, then there’s not much of an upside to gain from mispricing. In addition to this, Cable One has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from Cable One?

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 Cable One, at least in the near future.

What This Means For You

Are you a shareholder? Currently, CABO appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on CABO for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on CABO should the price fluctuate below its true value.

So while earnings quality is important, it's equally important to consider the risks facing Cable One at this point in time. Be aware that Cable One is showing 3 warning signs in our investment analysis and 2 of those make us uncomfortable...

If you are no longer interested in Cable One, 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.