Is It Too Late To Consider Buying RS Group plc (LON:RS1)?

RS Group plc (LON:RS1), might not be a large cap stock, but it saw significant share price movement during recent months on the LSE, rising to highs of UK£9.21 and falling to the lows of UK£7.22. 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 RS Group's current trading price of UK£7.79 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 RS 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 RS Group

What Is RS Group Worth?

According to my valuation model, RS Group seems to be fairly priced at around 2.1% below my intrinsic value, which means if you buy RS Group today, you’d be paying a fair price for it. And if you believe the company’s true value is £7.96, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, RS Group’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will RS Group generate?

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 7.1% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for RS 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 RS1’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 financial strength of the company. 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 RS1, now may not be the most advantageous 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.

Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in RS 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.