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Vista Group International Limited (NZSE:VGL), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the NZSE over the last few months. The company is now trading at yearly-high levels following the recent surge in its share price. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine Vista Group International’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
See our latest analysis for Vista Group International
Is Vista Group International Still Cheap?
According to our valuation model, Vista Group International seems to be fairly priced at around 3.48% above our intrinsic value, which means if you buy Vista Group International today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth NZ$3.77, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Vista Group International’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Vista Group International?
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. In Vista Group International's case, its revenues over the next few years are expected to grow by 47%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? VGL’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 financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?