Is Now The Time To Look At Buying Sureserve Group plc (LON:SUR)?
Sureserve Group plc (LON:SUR), is not the largest company out there, but it received a lot of attention from a substantial price movement on the AIM over the last few months, increasing to UK£1.05 at one point, and dropping to the lows of UK£0.76. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Sureserve Group's current trading price of UK£0.76 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 Sureserve Group’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 Sureserve Group
What's the opportunity in Sureserve Group?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 0.7% below my intrinsic value, which means if you buy Sureserve Group today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth £0.77, then there’s not much of an upside to gain from mispricing. In addition to this, Sureserve Group has a low beta, which suggests its share price is less volatile than the wider market.
What does the future of Sureserve Group look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. In Sureserve Group's case, its revenues over the next few years are expected to grow by 31%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? SUR’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on SUR, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. While conducting our analysis, we found that Sureserve Group has 2 warning signs and it would be unwise to ignore these.
If you are no longer interested in Sureserve Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
