Vocus Group Limited (ASX:VOC), a telecommunication services company based in Australia, saw significant share price volatility over the past couple of months on the ASX, rising to the highs of $3.56 and falling to the lows of $2.28. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether VOC's current trading price of $2.4 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 VOC’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for VOC

Is VOC still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 18% below my intrinsic value, which means if you buy VOC today, you’d be paying a fair price for it. And if you believe VOC’s true value is $2.83, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, it seems like VOC’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because VOC’s stock is less volatile than the wider market given its low beta.

What kind of growth will VOC generate?

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 revenues expected to grow by a double-digit 14.64% over the next couple of years, the outlook is positive for VOC. If the level of expenses is able to be maintained, 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? VOC’s optimistic 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 VOC? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on VOC, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for VOC, which 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.