Stock Analysis

Is It Too Late To Consider Buying PageGroup plc (LON:PAGE)?

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LSE:PAGE
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PageGroup plc (LON:PAGE), is not the largest company out there, but it led the LSE gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today I will analyse the most recent data on PageGroup’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for PageGroup

What's the opportunity in PageGroup?

According to my valuation model, PageGroup seems to be fairly priced at around 18.39% above my intrinsic value, which means if you buy PageGroup today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth £5.04, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that PageGroup’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will PageGroup generate?

earnings-and-revenue-growth
LSE:PAGE Earnings and Revenue Growth May 10th 2021

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. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. In PageGroup's case, its revenues over the next few years are expected to grow by 41%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has already priced in PAGE’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 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 an eye on PAGE, now may not be the most optimal 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 diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Diving deeper into the forecasts for PageGroup mentioned earlier will help you understand how analysts view the stock going forward. Luckily, you can check out what analysts are forecasting by clicking here.

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Valuation is complex, but we're helping make it simple.

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