At UK£2.50, Is LSL Property Services plc (LON:LSL) Worth Looking At Closely?

LSL Property Services plc (LON:LSL), is not the largest company out there, but it saw a decent share price growth of 16% on the LSE over the last few months. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a small cap stock, which tends to lack high analyst coverage, 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 LSL Property Services’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for LSL Property Services

What Is LSL Property Services Worth?

Great news for investors – LSL Property Services is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is £3.89, but it is currently trading at UK£2.50 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because LSL Property Services’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of LSL Property Services look like?

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. Though in the case of LSL Property Services, it is expected to deliver a highly negative revenue growth over the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Although LSL is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to LSL, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on LSL for some time, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you'd like to know more about LSL Property Services as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 1 warning sign for LSL Property Services you should be aware of.

If you are no longer interested in LSL Property Services, 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.