What Is Photo-Me International plc's (LON:PHTM) Share Price Doing?
Photo-Me International plc (LON:PHTM), is not the largest company out there, but it led the LSE gainers with a relatively large price hike in the past couple of weeks. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Today I will analyse the most recent data on Photo-Me International’s outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for Photo-Me International
Is Photo-Me International still cheap?
Great news for investors – Photo-Me International is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is £0.85, but it is currently trading at UK£0.52 on the share market, meaning that there is still an opportunity to buy now. However, given that Photo-Me International’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Photo-Me International look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 revenue growth of 3.0% expected in the upcoming year, short term growth doesn’t seem like a key driver for a buy decision for Photo-Me International.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since PHTM is currently undervalued, it may be a great time to increase your holdings in the stock. 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 PHTM for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy PHTM. 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 buy.
With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. To help with this, we've discovered 3 warning signs (1 shouldn't be ignored!) that you ought to be aware of before buying any shares in Photo-Me International.
If you are no longer interested in Photo-Me International, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
