Is Now The Time To Look At Buying SSP Group plc (LON:SSPG)?

SSP Group plc (LON:SSPG), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the LSE. As a mid-cap stock with high coverage 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 I will analyse the most recent data on SSP Group’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for SSP Group

What's the opportunity in SSP Group?

According to my valuation model, the stock is currently overvalued by about 22%, trading at UK£2.73 compared to my intrinsic value of £2.23. This means that the opportunity to buy SSP Group at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that SSP 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.

What kind of growth will SSP 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. With profit expected to grow by 71% over the next year, the near-term future seems bright for SSP Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in SSPG’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe SSPG 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 SSPG 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 optimistic prospect is encouraging for SSPG, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about SSP Group as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 3 warning signs for SSP Group you should be mindful of and 2 of them are significant.

If you are no longer interested in SSP Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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.

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