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Moonpig Group PLC (LON:MOON), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the LSE. While good news for shareholders, the company has traded much higher in the past year. 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? Today we will analyse the most recent data on Moonpig Group’s outlook and valuation to see if the opportunity still exists.
View our latest analysis for Moonpig Group
What's The Opportunity In Moonpig Group?
Great news for investors – Moonpig Group is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is £3.48, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Moonpig Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Moonpig Group look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Moonpig Group's revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since MOON is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on MOON for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MOON. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.