At UK£6.26, Is Aptitude Software Group plc (LON:APTD) Worth Looking At Closely?

Aptitude Software Group plc (LON:APTD), is not the largest company out there, but it saw a significant share price rise of over 20% in the past couple of months on the LSE. 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 Aptitude Software Group’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Aptitude Software Group

What's the opportunity in Aptitude Software Group?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 12.40% above my intrinsic value, which means if you buy Aptitude Software Group today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth £5.57, there’s only an insignificant downside when the price falls to its real value. What's more, Aptitude Software Group’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Aptitude Software Group?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Though in the case of Aptitude Software Group, it is expected to deliver a relatively unexciting earnings growth of 9.0%, 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? APTD’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 tabs on APTD, now may not be the most advantageous 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.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. While conducting our analysis, we found that Aptitude Software Group has 1 warning sign and it would be unwise to ignore it.

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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.
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