Is Inspired Entertainment (USA Stocks:INSE) about to rebound?
 | By Aina Ster | Macroaxis Story |
Every cloud has a silver lining, and for investors eyeing Inspired Entertainment (NASDAQ: INSE), a bullish reversal might just be on the horizon. This consumer cyclical company, operating in the gambling industry, has shown some promising signs in its technicals that could indicate a potential uptrend. Despite a 52-week low of $6.12, the stock has shown resilience with a 52-week high of $16.44. The company's shares have been trading above their 50-day moving average of $9.03, hinting at a possible upward momentum. The company's beta of 1.492 suggests it's more volatile than the market, which could mean larger price swings and potential opportunities for investors. Financially, Inspired Entertainment ended its fiscal year in December with a net income applicable to common shares of $15.9 million, despite an operating income of $48.9 million and a net interest loss of $24.3 million. The company's PE ratio stands at 16.26, which could be seen as a sign of undervaluation given the industry average. Analysts seem to share this optimistic outlook, with a consensus target price of $19, suggesting a potential upside from the naive expected forecast value of $10.11. With a market valuation of $9.94 billion and a possible upside price of $14.94, Inspired Entertainment could be poised for a bullish reversal. However, as always, investors should conduct their own due diligence before making any investment decisions. As many millennials are opting to avoid the hotel, restaurant, and leisure sectors, it seems prudent to delve deeper into Inspired Entertainment and attempt to comprehend its current market trends. As anticipated, Inspired Entertainment is beginning to reaffirm its inherent potential as shareholders grow increasingly confident in its future prospects. The company's stock price movements have largely mirrored overall market trends. The presence of solid fundamental indicators for the firm suggests a short-term price swing for Inspired's shareholders. Inspired Entertainment is set to announce its earnings today, with the next financial report slated for March 11, 2024.
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Reviewed by Gabriel Shpitalnik
Inspired Entertainment (NASDAQ: INSE) shows promising technical indicators that suggest a potential bullish reversal. Despite a Jensen Alpha of -0.5, indicating underperformance against the market, the stock's Beta of 1.492 suggests it's more volatile than the market, which could lead to significant price swings. Furthermore, the company's 52-week high and low of $16.44 and $6.12 respectively, coupled with a low price of $9.52, hint at a possible upside potential.
Important Takeaways
The average rating for Inspired Entertainment's stock is 'Strong Buy', as determined by two analysts. Is this consensus based on technical analysis? It's important to understand that conventional 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's investors and their perception of the stock's future value. Let's delve into a few aspects of Inspired Entertainment's technical analysis.
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 does Inspired Stands against Peers?
Analyzing Inspired Entertainment competition or peers my help you to expand the diversification possibilities of your existing portfolios and to get a better perspective on locking in new positions. Try to analyze the advantages of investing in traded instruments related to Inspired Entertainment across multiple sectors and thematic ideas. A good competitive analysis can cover a lot of different areas. But what areas to choose depends on who you are. The more exhaustive you are in your analysis, the more effective your competitive analysis will be. Check out Inspired Entertainment Competition DetailsInspired 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 2.7688. 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. Inspired Entertainment price dip over the last few months may raise some interest from shareholders. The stock closed today at a share price of 9.94 on very low momentum in trading volume. The company directors and management were not very successful in positioning the firm resources to exploit market volatility in November. However, diversifying your holdings with Inspired Entertainment or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 4.83.This high volatility is attributed to the latest market swings and not-so-good earnings reports for some of the Inspired Entertainment partners. As the great Warren Buffett once said, be fearful when others are greedy and greedy when others are fearful. This sentiment may be applicable to Inspired Entertainment (NASDAQ: INSE) as the stock is showing signs of a potential bullish reversal. Despite a 52-week low of $6.12, the stock has been steadily climbing, with a 50-day moving average of $9.03. Furthermore, the company's current ratio stands at 1.77X, indicating a healthy financial position. However, investors should be aware of the company's high total debt of $288.5M and the negative net interest income of $24.3M, suggesting that the company is paying more in interest than it's earning. On the positive side, the Wall Street target price is $18.5, indicating a potential upside. With a beta of 1.49, the stock is more volatile than the market, which could mean greater potential for returns, but also higher risk. In conclusion, while there are some concerns, the technicals suggest that Inspired Entertainment could be poised for a bullish reversal. .
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