Is There Now An Opportunity In Paragon Banking Group PLC (LON:PAG)?

Paragon Banking Group PLC (LON:PAG), operating in the financial services industry based in United Kingdom, received a lot of attention from a substantial price movement on the LSE over the last few months, increasing to £4.52 at one point, and dropping to the lows of £3.79. 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 Paragon Banking Group's current trading price of £4.14 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 Paragon Banking Group’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 Paragon Banking Group

Want to participate in a short research study? Help shape the future of investing tools and receive a $60 prize!

Is Paragon Banking Group still cheap?

Good news, investors! Paragon Banking Group is still a bargain right now. According to my valuation, the intrinsic value for the stock is £7.65, but it is currently trading at UK£4.14 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Paragon Banking Group’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.

What does the future of Paragon Banking Group look like?

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. Paragon Banking Group’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since PAG is currently undervalued, it may be a great time to accumulate more of 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 financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on PAG for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy PAG. 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 buy.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Paragon Banking Group. You can find everything you need to know about Paragon Banking Group in the latest infographic research report. If you are no longer interested in Paragon Banking Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.