Is It Too Late To Buy Sky plc (LSE:SKY)?
Let's talk about the popular Sky plc (LSE:SKY). The company's shares View our latest analysis for Sky
What is SKY worth?
According to my valuation model, SKY seems to be fairly priced at around 4% below my intrinsic value, which means if you buy SKY today, you’d be paying a reasonable price for it. And if you believe SKY’s true value is £9.65, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, it seems like SKY’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because SKY’s stock is less volatile than the wider market given its low beta.
What does the future of SKY look like?
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. With profit expected to grow by 62.09% over the next couple of years, the future seems bright for SKY. 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? It seems like the market has already priced in SKY’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at SKY? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on SKY, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for SKY, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Sky. You can find everything you need to know about SKY in the latest infographic research report. If you are no longer interested in Sky, 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.
