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Kier Group plc (LON: KIE) may not be a large-cap stock, but has attracted a lot of attention in recent months with a significant price movement on the LSE, which at times rose to £ 1.31 and then up. fell the lows of UK £ 1.07. Some stock price movements can provide investors with a better opportunity to get into the stock and possibly buy it at a lower price. One question to be answered is whether the Kier Group’s current trading price of £ 1.17 reflects the real value of the small cap. Or is it currently undervalued which gives us the opportunity to buy? Let’s take a look at the Kier Group’s outlook and value based on the latest financial data to see if there are catalysts for a price change.
Check out our latest analysis for the Kier Group
What opportunities does the Kier Group offer?
The share price currently makes sense based on my price multiple model, in which I compare the company’s price / earnings ratio with the industry average. In this case, I used price-to-earnings (PE) because there isn’t enough information to reliably predict the stock’s cash flows. I find that the Kier Group’s odds of 21.53x is slightly higher than its industry peers of 20.34x, which means that if you bought the Kier Group today you would be paying a relatively reasonable price for it. And if you think the Kier Group should act at this level over the long term, then it shouldn’t have much of a downside compared to other industry peers. Is there still a way to shop cheaply in the future? Since the Kier Group’s share price is quite volatile, it could potentially go lower (or higher) in the future, which gives us another buying opportunity. This is based on its high beta, which is a good indicator of how much the stock is moving relative to the rest of the market.
Can we expect growth from the Kier Group?
The future outlook is an important consideration when buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that intrinsic value relative to price is what matters most, a more compelling investment thesis would be high growth potential at a cheap price. The Kier Group’s revenue growth is expected to be in the tens for the coming years, which points to a solid future. Unless spending increases at the same level or higher, that revenue growth should translate into robust cash flows that translate into higher stock value.
What that means for you:
Are you a shareholder? It seems like the market has already priced in KIE’s positive outlook as stocks trade around the industry price multiples. But there are also other important factors that we haven’t considered today, such as the company’s financial strength. Have these factors changed since you last looked at KIE? Will you be confident enough to invest in the company if it falls below the industry P / E ratio?
Are you a potential investor? If you’ve been keeping an eye on the KIE, now may not be the best time to buy it as it is traded around industry price multipliers. However, the positive outlook is encouraging for KIE, which means it is worth digging deeper into other factors such as the strength of its balance sheet to capitalize on the next price decline.
In addition to the quality of the earnings, it is just as important to consider the Kier Group’s risks at this point in time. For example we discovered 2 warning signs that you should take a look at the Kier Group to get a better idea of the Kier Group.
If you are no longer interested in the Kier Group, you can view our list of over 50 other stocks with high growth potential on our free platform.
This article from Simply Wall St is of a general nature. We only provide comments based on historical data and analyst projections using an unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamentals. Note that our analysis may not take into account the latest company announcements or quality material, which may be sensitive to the price. Simply Wall St has no position in any of the stocks mentioned.
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