SDS Group Berhad (KLSE:SDS), might not be a large cap stock, but it saw a decent share price growth of 15% on the KLSE over the last few months. The company is inching closer to its yearly highs following the recent share price climb. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at SDS Group Berhad’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for SDS Group Berhad

What's The Opportunity In SDS Group Berhad?

Great news for investors – SDS Group Berhad is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 11.01x is currently well-below the industry average of 14.26x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, SDS Group Berhad’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of SDS Group Berhad 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 profit growth of 7.5% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for SDS Group Berhad, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since SDS is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on SDS for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy SDS. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed assessment.