Is There Now An Opportunity In Lombard Risk Management plc (LON:LRM)?
Lombard Risk Management plc (AIM:LRM), a software company based in United Kingdom, received a lot of attention from a substantial price movement on the AIM in the over the last few months, increasing to £0.11 at one point, and dropping to the lows of £0.06. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Lombard Risk Management’s current trading price of £0.06 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Lombard Risk Management’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for Lombard Risk Management
What is Lombard Risk Management worth?
Great news for investors – Lombard Risk Management is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is £0.14, but it is currently trading at £0.06 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Lombard Risk Management’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
Can we expect growth from Lombard Risk Management?
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. 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 revenues expected to grow by 67.44% over the next couple of years, the future seems bright for Lombard Risk Management. If the level of expenses is able to be maintained, it looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since Lombard Risk Management is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on Lombard Risk Management for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy Lombard Risk Management. 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 Lombard Risk Management. You can find everything you need to know about Lombard Risk Management in the latest infographic research report. If you are no longer interested in Lombard Risk Management, 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.
