What Is Speedy Hire Plc's (LON:SDY) Share Price Doing?

While Speedy Hire Plc (LON:SDY) might not have the largest market cap around , it saw significant share price movement during recent months on the LSE, rising to highs of UK£0.38 and falling to the lows of UK£0.28. 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 Speedy Hire's current trading price of UK£0.29 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 Speedy Hire’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 Speedy Hire

Is Speedy Hire Still Cheap?

Great news for investors – Speedy Hire is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is £0.48, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Speedy Hire’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Speedy Hire?

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. However, with a relatively muted revenue growth of 7.2% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Speedy Hire, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since SDY is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. 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 SDY for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy SDY. 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 investment decision.

So while earnings quality is important, it's equally important to consider the risks facing Speedy Hire at this point in time. Every company has risks, and we've spotted 3 warning signs for Speedy Hire (of which 1 doesn't sit too well with us!) you should know about.

If you are no longer interested in Speedy Hire, 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.