Why PageGroup plc (LON:PAGE) Could Be Worth Watching

By
Simply Wall St
Published
January 10, 2022
LSE:PAGE
Source: Shutterstock

While PageGroup plc (LON:PAGE) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the LSE over the last few months, increasing to UK£6.81 at one point, and dropping to the lows of UK£6.08. 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£6.20 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 PageGroup’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 PageGroup

What's the opportunity in PageGroup?

Great news for investors – PageGroup is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is £9.72, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. 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 January 10th 2022

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. PageGroup's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since PAGE is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. 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 PAGE for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy PAGE. 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 buy.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example, we've discovered 2 warning signs that you should run your eye over to get a better picture of PageGroup.

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.

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