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Wickes Group plc (LON:WIX), might not be a large cap stock, but it led the LSE gainers with a relatively large price hike in the past couple of weeks. The recent jump in the share price has meant that the company is trading at close to its 52-week high. 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? Let’s examine Wickes Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
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What Is Wickes Group Worth?
According to our valuation model, Wickes Group seems to be fairly priced at around 19% below our intrinsic value, which means if you buy Wickes Group today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth £2.32, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Wickes Group’s share price may be more stable over time (relative to the market), as indicated by its low beta.
Check out our latest analysis for Wickes Group
What does the future of Wickes Group look like?
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. With profit expected to more than double over the next couple of years, the future seems bright for Wickes Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? WIX’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 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 WIX, 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 the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.