Petroleum Geo-Services ASA (OB:PGS), an energy company based in Norway, led the OB gainers with a relatively large price hike in the past couple of weeks. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Petroleum Geo-Services’s outlook and valuation to see if the opportunity still exists. View our latest analysis for Petroleum Geo-Services
What’s the opportunity in Petroleum Geo-Services?Great news for investors – Petroleum Geo-Services is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is NOK45.12, but it is currently trading at ØRE29.55 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Petroleum Geo-Services’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from Petroleum Geo-Services?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. With profit expected to grow by 79.59% over the next year, the near-term future seems bright for Petroleum Geo-Services. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since PGS is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on PGS for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy PGS. 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Petroleum Geo-Services. You can find everything you need to know about Petroleum Geo-Services in the latest infographic research report. If you are no longer interested in Petroleum Geo-Services, you can use our free platform to see my list of over 50 other stocks with a high growth potential.