What Is Kelsian Group Limited's (ASX:KLS) Share Price Doing?

Kelsian Group Limited (ASX:KLS), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the ASX. While good news for shareholders, the company has traded much higher in the past year. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today we will analyse the most recent data on Kelsian Group’s outlook and valuation to see if the opportunity still exists.

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What's The Opportunity In Kelsian Group?

Kelsian Group appears to be overvalued by 25% at the moment, based on our discounted cash flow valuation. The stock is currently priced at AU$4.49 on the market compared to our intrinsic value of A$3.59. This means that the buying opportunity has probably disappeared for now. Furthermore, Kelsian Group’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

Check out our latest analysis for Kelsian Group

Can we expect growth from Kelsian Group?

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 64% over the next couple of years, the future seems bright for Kelsian Group. 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? KLS’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe KLS should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on KLS for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for KLS, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Kelsian Group as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 3 warning signs for Kelsian Group you should be mindful of and 1 of these is a bit unpleasant.

If you are no longer interested in Kelsian 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.