Is There Now An Opportunity In Aptitude Software Group plc (LON:APTD)?

Aptitude Software Group plc (LON:APTD), is not the largest company out there, but it saw significant share price movement during recent months on the LSE, rising to highs of UK£4.80 and falling to the lows of UK£4.14. 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 Aptitude Software Group's current trading price of UK£4.47 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 Aptitude Software Group’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 Aptitude Software Group

Is Aptitude Software Group still cheap?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 40.72x is currently trading slightly below its industry peers’ ratio of 41.12x, which means if you buy Aptitude Software Group today, you’d be paying a reasonable price for it. And if you believe that Aptitude Software Group should be trading at this level in the long run, then there’s not much of an upside to gain over and above other industry peers. In addition to this, it seems like Aptitude Software Group’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s trading around the price multiples of other industry peers. This is because the stock is less volatile than the wider market given its low beta.

Can we expect growth from Aptitude Software 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. However, with a relatively muted profit growth of 0.4% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Aptitude Software Group, at least in the short 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 industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at APTD? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

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 industry price multiples. However, the positive growth outlook may mean it’s worth diving deeper into other factors in order to take advantage of the next price drop.

It can be quite valuable to consider what analysts expect for Aptitude Software Group from their most recent forecasts. At Simply Wall St, we have the analysts estimates which you can view by clicking here.

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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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