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At US$18.02, Is Ardagh Group S.A. (NYSE:ARD) Worth Looking At Closely?

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Simply Wall St
·3 min read
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Ardagh Group S.A. (NYSE:ARD), is not the largest company out there, but it received a lot of attention from a substantial price increase on the NYSE over the last few months. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Ardagh Group’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Ardagh Group

What's the opportunity in Ardagh Group?

Good news, investors! Ardagh Group is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $29.56, but it is currently trading at US$18.02 on the share market, meaning that there is still an opportunity to buy now. However, given that Ardagh Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Ardagh Group?

earnings-and-revenue-growth
earnings-and-revenue-growth

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. However, with a relatively muted revenue growth of 5.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Ardagh Group, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since ARD is currently undervalued, it may be a great time to increase your holdings in the stock. 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 ARD 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 ARD. 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 investment decision.

If you want to dive deeper into Ardagh Group, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Ardagh Group has 2 warning signs and it would be unwise to ignore them.

If you are no longer interested in Ardagh Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.