Is Inspired Entertainment (USA Stocks:INSE) moving to revert?
 | By Rifka Kats | Macroaxis Story |
Inspired Entertainment (NASDAQ: INSE) has shown some volatility with a Mean Deviation of 2.73 and a Variance of 21.85, indicating potential risk for investors. However, the stock's 200 Day Moving Average stands at 12.26, significantly higher than the current quote of 8.39, suggesting potential for growth if the company can reverse the recent downward trend.
Important Takeaways
The average rating for Inspired Entertainment is a "Strong Buy," according to two analysts. Is this consensus based on technical analyses? As we know, typical technical analysis involves the use of price momentum, patterns, and trends derived from historical prices. The goal is to identify signals based on the market sentiment of Inspired Entertainment investors, which reflects their perception of the company's future value. Let's examine a few aspects of Inspired Entertainment's technical analysis. The company has a Profit Margin (PM) of 0.06%, indicating that even a minor decrease in revenue could wipe out profits, leading to a net loss. This is significantly below average. Additionally, it has an Operating Margin (OM) of 0.16%, suggesting that for every $100 of sales, it generates a net operating income of $0.16.Macroaxis uses a strict editorial review process to publish stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.
Reviewed by Gabriel Shpitalnik
As a part of the Consumer Cyclical sector and Gambling industry, Inspired Entertainment (NASDAQ: INSE) has been a notable player in the market. The company, which ended its fiscal year in December, has shown some interesting financials that could potentially unveil growth prospects for investors. Inspired Entertainment's net income applicable to common shares stands at $15.9M, with a change to net income of $10.8M. Despite a net interest income loss of $24.3M, the company managed to report income before tax of $25.5M, indicating a strong operational performance. The company's valuation real value is $10.71, slightly higher than its market value of $8.39, suggesting that the stock may be undervalued. The PE ratio of 13.75 further supports this view. From a technical perspective, the stock's 200-day moving average stands at $12.26, indicating a potential upside from the current levels. Analysts seem to agree with this bullish view, with an overall consensus rating of 'Strong Buy'. The average target price estimated by analysts is $19, representing a significant upside potential from the current levels. However, investors should also consider the potential risks. The company has a short percent of 0.0104 and a short ratio of 1.21, indicating some level of short interest in the stock. In conclusion, Inspired Entertainment presents an interesting investment opportunity with potential growth prospects. However, as always, investors should conduct their own thorough research before making investment decisions. As many millennials are opting to avoid the hotel, restaurant, and leisure sector, it is sensible to delve deeper into Inspired Entertainment and attempt to comprehend its current market trends. As we have previously suggested, Inspired Entertainment is starting to experience a decline as shareholders become increasingly bearish due to heightened sector volatility. Inspired Entertainment actively responds to market trends. Many of the company's stock price movements have been reflective of the overall market trends. Solid fundamental indicators of the company may suggest signs of short-term price fluctuations for shareholders. Inspired Entertainment is set to announce its earnings tomorrow. The subsequent financial report is anticipated on March 11, 2024.
Using predictive technical analysis, we can analyze different prices and returns patterns and diagnose historical swings to determine the real value of Inspired Entertainment. In general, sophisticated investors focus on analyzing Inspired Entertainment stock price patterns and their correlations with different microeconomic environment and drivers. They apply predictive analytics to build Inspired Entertainment's daily price indicators and compare them against related drivers such as momentum indicators and various other types of predictive indicators. Using this methodology combined with a more conventional technical analysis and fundamental analysis, we attempt to find the most accurate representation of Inspired Entertainment's intrinsic value. In addition to deriving basic predictive indicators for Inspired Entertainment, many experienced traders also check how macroeconomic factors affect Inspired Entertainment price patterns. Please read more on our technical analysis page or use our predictive modules below to complement your research.
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of Inspired Entertainment's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
How important is Inspired Entertainment's Liquidity
Inspired Entertainment financial leverage refers to using borrowed capital as a funding source to finance Inspired Entertainment ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Inspired Entertainment financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Inspired Entertainment's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Inspired Entertainment's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Inspired Entertainment's total debt and its cash.
Inspired Entertainment Gross Profit
Inspired Entertainment Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Inspired Entertainment previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Inspired Entertainment Gross Profit growth over the last 10 years. Please check Inspired Entertainment's gross profit and other fundamental indicators for more details.
Another Deeper Perspective
This firm has a beta of 2.8988. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Inspired Entertainment will likely underperform. The beta indicator helps investors understand whether Inspired Entertainment moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Inspired deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns. The company reported the previous year's revenue of 285.4 M. Net Income was 22.3 M with profit before overhead, payroll, taxes, and interest of 213.4 M. "As every investor knows, past performance is not indicative of future results, but it can certainly provide some insight.Inspired Entertainment (NASDAQ: INSE) has shown some interesting movements in its technical analysis. The company's 52-week high stands at $16.44, while its 52-week low is $6.12, indicating a significant range of volatility. Currently, the stock is trading around its 50-day moving average of $9.38, below its 200-day moving average of $12.26, suggesting a bearish trend. However, Wall Street's target price for INSE is $18.5, indicating potential upside. The company's beta of 1.49 suggests it is more volatile than the market, which could mean greater potential for returns, but also higher risk. The company's debt-to-equity ratio is relatively low at 0.97%, suggesting it has been conservative in its use of debt. However, the company's probability of bankruptcy stands at 47.61%, which is a risk factor that investors should consider. Despite these risks, the company's net income of $22.3M and operating income of $48.9M show it has been profitable, which could make it an attractive investment for those willing to take on some risk." .
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