in G5

#G5 Entertainment: sanity check

newlogoG5 Entertainment’s share continues to decline today, following its recent sell-off in connection with its sluggish Q2 report.

In times like this, it seems appropriate to keep calm and look at what’s actually reasonable and what is an overreaction by the market. In the following graph we show G5 Entertainment’s actual share price development and a justified share price when applying a PE-ratio of 15x on the the respective year’s EPS. Note that a PE-ratio of 15x for a fast-growing profitable company like G5 hardly seems justified and we continue to argue that the market will value the company higher than that once the relisting to Nasdaq OMX is done.

G5shareprice

The simple sanity check shows that share price of around SEK 75 are around the corner.

Nordic Investor

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