Should You Buy Games Workshop Group PLC (LON:GAW) Now?
Games Workshop Group PLC (LSE:GAW), a leisure company based in United Kingdom, led the LSE gainers with a relatively large price hike in the past couple of weeks. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at Games Workshop Group’s outlook and value based on the most recent financial data to see if the opportunity still exists. See our latest analysis for Games Workshop Group
What is Games Workshop Group worth?
Great news for investors – Games Workshop Group is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is £39.93, but it is currently trading at UK£27.75 on the share market, meaning that there is still an opportunity to buy now. Games Workshop Group’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What kind of growth will Games Workshop Group generate?
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. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted revenue growth of 4.39% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Games Workshop Group, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since GAW is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on GAW for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy GAW. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Games Workshop Group. You can find everything you need to know about Games Workshop Group in the latest infographic research report. If you are no longer interested in Games Workshop Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
