Should You Investigate Aston Martin Lagonda Global Holdings plc (LON:AML) At UK£18.00?

Aston Martin Lagonda Global Holdings plc (LON:AML), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the LSE over the last few months, increasing to UK£20.81 at one point, and dropping to the lows of UK£16.51. 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 Aston Martin Lagonda Global Holdings' current trading price of UK£18.00 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Aston Martin Lagonda Global Holdings’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 Aston Martin Lagonda Global Holdings

Is Aston Martin Lagonda Global Holdings still cheap?

According to my valuation model, Aston Martin Lagonda Global Holdings seems to be fairly priced at around 13.22% above my intrinsic value, which means if you buy Aston Martin Lagonda Global Holdings today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth £15.90, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Aston Martin Lagonda Global Holdings’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from Aston Martin Lagonda Global Holdings?

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 grow by 94% over the next couple of years, the future seems bright for Aston Martin Lagonda Global Holdings. 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? It seems like the market has already priced in AML’s positive outlook, 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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on AML, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. Every company has risks, and we've spotted 2 warning signs for Aston Martin Lagonda Global Holdings you should know about.

If you are no longer interested in Aston Martin Lagonda Global Holdings, 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. 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.

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