Should You Think About Buying Accrol Group Holdings plc (LON:ACRL) Now?

While Accrol Group Holdings plc (LON:ACRL) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the AIM over the last few months. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine Accrol Group Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Accrol Group Holdings

Is Accrol Group Holdings still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 4.71% above my intrinsic value, which means if you buy Accrol Group Holdings today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is £0.63, there’s only an insignificant downside when the price falls to its real value. What's more, Accrol Group Holdings’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Accrol Group Holdings?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. In Accrol Group Holdings' case, its revenues over the next few years are expected to grow by 48%, 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 ACRL’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 confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on ACRL, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect 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.

If you want to dive deeper into Accrol Group Holdings, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 3 warning signs for Accrol Group Holdings (of which 2 don't sit too well with us!) you should know about.

If you are no longer interested in Accrol Group Holdings, 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. 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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