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Oxford Metrics plc (LON:OMG), 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£0.67 and falling to the lows of UK£0.52. 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 Oxford Metrics' current trading price of UK£0.56 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 Oxford Metrics’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Oxford Metrics
What Is Oxford Metrics Worth?
According to our valuation model, Oxford Metrics seems to be fairly priced at around 14% below our intrinsic value, which means if you buy Oxford Metrics today, you’d be paying a fair price for it. And if you believe the company’s true value is £0.66, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Oxford Metrics’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What kind of growth will Oxford Metrics generate?
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. 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. Oxford Metrics' earnings over the next few years are expected to increase by 22%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? It seems like the market has already priced in OMG’s positive outlook, 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 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 OMG, 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.