Should You Think About Buying Safestay plc (LON:SSTY) Now?

Safestay plc (LON:SSTY), is not the largest company out there, but it received a lot of attention from a substantial price movement on the AIM over the last few months, increasing to UK£0.24 at one point, and dropping to the lows of UK£0.20. 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 Safestay's current trading price of UK£0.20 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 Safestay’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Safestay

What's The Opportunity In Safestay?

Good news, investors! Safestay is still a bargain right now. According to our valuation, the intrinsic value for the stock is £0.30, but it is currently trading at UK£0.20 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Safestay’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Safestay?

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. However, with a relatively muted revenue growth of 5.4% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Safestay, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since SSTY is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on SSTY for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy SSTY. 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.

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 Safestay (1 is significant!) and we strongly recommend you look at these before investing.

If you are no longer interested in Safestay, 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.