At US$25.66, Is International Game Technology PLC (NYSE:IGT) Worth Looking At Closely?

International Game Technology PLC (NYSE:IGT), is not the largest company out there, but it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$28.09 at one point, and dropping to the lows of US$25.25. 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 International Game Technology’s current trading price of US$25.66 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at International Game Technology’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for International Game Technology

What’s The Opportunity In International Game Technology?

According to our valuation model, the stock is currently overvalued by about 32%, trading at US$25.66 compared to our intrinsic value of $19.49. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Given that International Game Technology’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of International Game Technology look like?

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. With profit expected to more than double over the next couple of years, the future seems bright for International Game Technology. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

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What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in IGT’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe IGT should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on IGT for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for IGT, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

With this in mind, we wouldn’t consider investing in a stock unless we had a thorough understanding of the risks. Case in point: We’ve spotted 3 warning signs for International Game Technology you should be mindful of and 1 of them is significant.

If you are no longer interested in International Game Technology, 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.