Spotless Group Holdings Limited (ASX:SPO), a commercial services and supplies company based in Australia, maintained its current share price over the past couple of month on the ASX, with a relatively tight range of A$1.07 to A$1.15. However, does this price actually reflect the true value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at SPO’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Spotless Group Holdings
Is SPO still cheap?According to my valuation model, SPO seems to be fairly priced at around 20% below my intrinsic value, which means if you buy SPO today, you’d be paying a fair price for it. And if you believe that SPO is really worth A$1.43, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, it seems like SPO’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because SPO’s stock is less volatile than the wider market given its low beta.
Can we expect growth from SPO?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 SPO future expectations. Though in the case of SPO, it is expected to deliver a relatively unexciting top-line growth of 3.87% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for SPO, at least in the near term.
What this means for you:
Are you a shareholder? SPO’s 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 track record of its management team. Have these factors changed since the last time you looked at SPO? 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 SPO, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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 Spotless Group Holdings. You can find everything you need to know about SPO in the latest infographic research report. If you are no longer interested in Spotless Group Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.