Wey Education plc (LON:WEY), a consumer services company based in United Kingdom, saw significant share price volatility over the past couple of months on the AIM, rising to the highs of £0.27 and falling to the lows of £0.15. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Wey Education’s current trading price of £0.16 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 Wey Education’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View out our latest analysis for Wey Education
Is Wey Education still cheap?Good news, investors! Wey Education is still a bargain right now. My valuation model shows that the intrinsic value for the stock is £0.52, but it is currently trading at UK£0.16 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Wey Education’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
What does the future of Wey Education look like?Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With revenue expected to more than double in the next few years, the future appears to be extremely bright for Wey Education. If expenses can also be maintained, it looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since WEY is currently undervalued, it may be a great time to accumulate more of 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 capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on WEY for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy WEY. 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Wey Education. You can find everything you need to know about Wey Education in the latest infographic research report. If you are no longer interested in Wey Education, you can use our free platform to see my list of over 50 other stocks with a high growth potential.