What Is Kromek Group plc's (LON:KMK) Share Price Doing?

Kromek Group plc (LON:KMK), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the AIM. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. 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? Let’s take a look at Kromek Group’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Kromek Group

Is Kromek Group Still Cheap?

According to our valuation model, Kromek Group seems to be fairly priced at around 13.48% above our intrinsic value, which means if you buy Kromek Group today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth £0.05, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, Kromek Group has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from Kromek Group?

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 Kromek Group, it is expected to deliver a negative earnings growth of -3.2%, 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? KMK seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on KMK for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on KMK should the price fluctuate below its true value.

If you'd like to know more about Kromek Group as a business, it's important to be aware of any risks it's facing. For example - Kromek Group has 4 warning signs we think you should be aware of.

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

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

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.