Stock Analysis

Why Savills plc (LON:SVS) Could Be Worth Watching

LSE:SVS
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While Savills plc (LON:SVS) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the LSE, rising to highs of UK£9.93 and falling to the lows of UK£8.03. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Savills' current trading price of UK£8.13 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Savills’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Savills

Is Savills Still Cheap?

Good news, investors! Savills is still a bargain right now. According to my valuation, the intrinsic value for the stock is £10.28, but it is currently trading at UK£8.13 on the share market, meaning that there is still an opportunity to buy now. However, given that Savills’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 does the future of Savills look like?

earnings-and-revenue-growth
LSE:SVS Earnings and Revenue Growth July 8th 2023

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. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 6.5% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Savills, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since SVS is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on SVS for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy SVS. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. You'd be interested to know, that we found 2 warning signs for Savills and you'll want to know about them.

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

Valuation is complex, but we're helping make it simple.

Find out whether Savills is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.