What Is Accrol Group Holdings plc's (LON:ACRL) Share Price Doing?

Accrol Group Holdings plc (LON:ACRL), might not be a large cap stock, but it saw a significant share price rise of over 20% in the past couple of months on the AIM. 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 take a look at Accrol Group Holdings’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Accrol Group Holdings

What is Accrol Group Holdings worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 5.80% 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 that the stock is really worth £0.60, there’s only an insignificant downside when the price falls to its real value. Furthermore, Accrol Group Holdings’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will Accrol Group Holdings generate?

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? ACRL’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. 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 ACRL, now may not be the most advantageous 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 diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example, Accrol Group Holdings has 5 warning signs (and 2 which make us uncomfortable) we think you should know about.

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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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