Is Now An Opportune Moment To Examine Keller Group plc (LON:KLR)?

Keller Group plc (LON:KLR), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the LSE. The recent jump in the share price has meant that the company is trading around its 52-week high. 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. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Keller Group’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Keller Group

What Is Keller Group Worth?

According to our valuation model, Keller Group seems to be fairly priced at around 12% below our intrinsic value, which means if you buy Keller Group today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth £18.45, then there isn’t much room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Keller 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.

Can we expect growth from Keller Group?

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. However, with a relatively muted profit growth of 5.2% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Keller Group, at least in the short term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in KLR’s future outlook, 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 the stock? 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 tabs on KLR, 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.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Keller Group.

If you are no longer interested in Keller 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.