At UK£1.56, Is Accsys Technologies PLC (LON:AXS) Worth Looking At Closely?

Accsys Technologies PLC (LON:AXS), might not be a large cap stock, but it saw a decent share price growth in the teens level on the AIM over the last few months. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on Accsys Technologies’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Accsys Technologies

Is Accsys Technologies still cheap?

According to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average, the stock currently looks expensive. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Accsys Technologies’s ratio of 62.37x is above its peer average of 20.03x, which suggests the stock is trading at a higher price compared to the Forestry industry. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Accsys Technologies’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Accsys Technologies look like?

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. With profit expected to more than double over the next couple of years, the future seems bright for Accsys Technologies. 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 AXS’s positive outlook, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe AXS should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio 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 tabs on AXS for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for AXS, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Accsys Technologies, you'd also look into what risks it is currently facing. Be aware that Accsys Technologies is showing 2 warning signs in our investment analysis and 1 of those is a bit concerning...

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

If you’re looking to trade Accsys Technologies, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.