Is Now The Time To Look At Buying TheWorks.co.uk plc (LON:WRKS)?

While TheWorks.co.uk plc (LON:WRKS) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the LSE over the last few months, increasing to UK£0.41 at one point, and dropping to the lows of UK£0.24. 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 TheWorks.co.uk's current trading price of UK£0.24 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 TheWorks.co.uk’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for TheWorks.co.uk

What Is TheWorks.co.uk Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 5.32% above our intrinsic value, which means if you buy TheWorks.co.uk today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth £0.23, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that TheWorks.co.uk’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will TheWorks.co.uk 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. Though in the case of TheWorks.co.uk, it is expected to deliver a relatively unexciting top-line growth of 9.4% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? WRKS’s 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 WRKS, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Our analysis shows 2 warning signs for TheWorks.co.uk (1 is significant!) and we strongly recommend you look at them before investing.

If you are no longer interested in TheWorks.co.uk, 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.