While Flight Centre Travel Group Limited (ASX:FLT) might not have the largest market cap around , it saw significant share price movement during recent months on the ASX, rising to highs of AU$13.85 and falling to the lows of AU$11.94. 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 Flight Centre Travel Group's current trading price of AU$12.80 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 Flight Centre Travel Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What Is Flight Centre Travel Group Worth?
Good news, investors! Flight Centre Travel Group is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is A$19.84, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Flight Centre Travel 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.
View our latest analysis for Flight Centre Travel Group
What does the future of Flight Centre Travel 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. Flight Centre Travel Group's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since FLT is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. 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 FLT for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy FLT. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.
So while earnings quality is important, it's equally important to consider the risks facing Flight Centre Travel Group at this point in time. Every company has risks, and we've spotted 2 warning signs for Flight Centre Travel Group you should know about.
If you are no longer interested in Flight Centre Travel 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.