Why Restore plc (LON:RST) Could Be Worth Watching
Restore plc (LON:RST), might not be a large cap stock, but it saw significant share price movement during recent months on the AIM, rising to highs of UK£3.80 and falling to the lows of UK£3.00. 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 Restore's current trading price of UK£3.20 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 Restore’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Restore
What is Restore worth?
According to my valuation model, Restore seems to be fairly priced at around 10% below my intrinsic value, which means if you buy Restore today, you’d be paying a fair price for it. And if you believe that the stock is really worth £3.57, then there’s not much of an upside to gain from mispricing. In addition to this, Restore has a low beta, which suggests its share price is less volatile than the wider market.
Can we expect growth from Restore?
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 profit expected to more than double over the next couple of years, the future seems bright for Restore. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? RST’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 confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on RST, 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 the company, 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.
If you want to dive deeper into Restore, you'd also look into what risks it is currently facing. You'd be interested to know, that we found 3 warning signs for Restore and you'll want to know about these.
If you are no longer interested in Restore, 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.
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