Stock Analysis

What Is PageGroup plc's (LON:PAGE) Share Price Doing?

  •  Updated
LSE:PAGE
Source: Shutterstock

PageGroup plc (LON:PAGE), 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£4.73 and falling to the lows of UK£3.83. 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 PageGroup's current trading price of UK£3.83 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 PageGroup’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for PageGroup

What Is PageGroup Worth?

Good news, investors! PageGroup is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 7.56x is currently well-below the industry average of 17.61x, meaning that it is trading at a cheaper price relative to its peers. Although, there may be another chance to buy again in the future. This is because PageGroup’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 PageGroup?

earnings-and-revenue-growth
LSE:PAGE Earnings and Revenue Growth September 2nd 2022

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. However, with a negative profit growth of -12% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for PageGroup. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although PAGE is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to PAGE, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on PAGE for some time, but hesitant on making the leap, I recommend you research further into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Our analysis shows 2 warning signs for PageGroup (1 is a bit concerning!) and we strongly recommend you look at them before investing.

If you are no longer interested in PageGroup, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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

Find out whether PageGroup is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis