When Should You Buy Games Workshop Group PLC (LON:GAW)?

While Games Workshop Group PLC (LON:GAW) might not have the largest market cap around , it saw a decent share price growth of 16% on the LSE over the last few months. The company is now trading at yearly-high levels following the recent surge in its share price. As a well-established company, which tends to be well-covered by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today we will analyse the most recent data on Games Workshop Group’s outlook and valuation to see if the opportunity still exists.

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Is Games Workshop Group Still Cheap?

Games Workshop Group appears to be overvalued by 31% at the moment, based on our discounted cash flow valuation. The stock is currently priced at UK£144 on the market compared to our intrinsic value of £110.20. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Given that Games Workshop Group’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.

View our latest analysis for Games Workshop Group

What kind of growth will Games Workshop Group generate?

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. Though in the case of Games Workshop Group, it is expected to deliver a relatively unexciting earnings growth of 0.5%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in GAW’s future outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe GAW should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on GAW for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Games Workshop Group, you'd also look into what risks it is currently facing. You'd be interested to know, that we found 1 warning sign for Games Workshop Group and you'll want to know about this.

If you are no longer interested in Games Workshop Group, 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.