At UK£4.65, Is Alpha Financial Markets Consulting plc (LON:AFM) Worth Looking At Closely?

Alpha Financial Markets Consulting plc (LON:AFM), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the AIM over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Alpha Financial Markets Consulting’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Alpha Financial Markets Consulting

Is Alpha Financial Markets Consulting Still Cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 6.49% above my intrinsic value, which means if you buy Alpha Financial Markets Consulting today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth £4.37, 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 Alpha Financial Markets Consulting’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 Alpha Financial Markets Consulting 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. With profit expected to grow by 74% over the next couple of years, the future seems bright for Alpha Financial Markets Consulting. 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 AFM’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 tabs on AFM, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which 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.

So while earnings quality is important, it's equally important to consider the risks facing Alpha Financial Markets Consulting at this point in time. You'd be interested to know, that we found 1 warning sign for Alpha Financial Markets Consulting and you'll want to know about it.

If you are no longer interested in Alpha Financial Markets Consulting, 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.