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Vertu Motors plc (LON:VTU), is not the largest company out there, but it saw significant share price movement during recent months on the AIM, rising to highs of UK£0.62 and falling to the lows of UK£0.50. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Vertu Motors' current trading price of UK£0.54 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 Vertu Motors’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What's The Opportunity In Vertu Motors?
According to our valuation model, the stock is currently overvalued by about 33%, trading at UK£0.54 compared to our intrinsic value of £0.40. Not the best news for investors looking to buy! Furthermore, Vertu Motors’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
Check out our latest analysis for Vertu Motors
What kind of growth will Vertu Motors generate?
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. With profit expected to grow by 56% over the next year, the near-term future seems bright for Vertu Motors. 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? It seems like the market has well and truly priced in VTU’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe VTU should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.