Is There Now An Opportunity In Flutter Entertainment plc (LON:FLTR)?

Let's talk about the popular Flutter Entertainment plc (LON:FLTR). The company's shares led the LSE gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today I will analyse the most recent data on Flutter Entertainment’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Flutter Entertainment

Is Flutter Entertainment Still Cheap?

According to my valuation model, Flutter Entertainment seems to be fairly priced at around 5.7% below my intrinsic value, which means if you buy Flutter Entertainment today, you’d be paying a reasonable price for it. And if you believe the company’s true value is £145.80, then there’s not much of an upside to gain from mispricing. Furthermore, Flutter Entertainment’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Flutter Entertainment?

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. In Flutter Entertainment's case, its revenues over the next few years are expected to grow by 68%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in FLTR’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on FLTR, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Flutter Entertainment at this point in time. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Flutter Entertainment.

If you are no longer interested in Flutter Entertainment, 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.