UK markets close in 4 hours 13 minutes
  • FTSE 100

    6,402.09
    +68.25 (+1.08%)
     
  • FTSE 250

    19,762.11
    +179.76 (+0.92%)
     
  • AIM

    1,033.26
    -1.78 (-0.17%)
     
  • GBP/EUR

    1.1235
    -0.0017 (-0.16%)
     
  • GBP/USD

    1.3343
    +0.0021 (+0.16%)
     
  • BTC-GBP

    14,223.37
    +377.22 (+2.72%)
     
  • CMC Crypto 200

    375.00
    +13.58 (+3.76%)
     
  • S&P 500

    3,577.59
    +20.05 (+0.56%)
     
  • DOW

    29,591.27
    +327.79 (+1.12%)
     
  • CRUDE OIL

    43.45
    +0.39 (+0.91%)
     
  • GOLD FUTURES

    1,809.70
    -28.10 (-1.53%)
     
  • NIKKEI 225

    26,165.59
    +638.22 (+2.50%)
     
  • HANG SENG

    26,588.20
    +102.00 (+0.39%)
     
  • DAX

    13,250.17
    +123.20 (+0.94%)
     
  • CAC 40

    5,563.00
    +70.85 (+1.29%)
     

Should You Think About Buying Intercede Group plc (LON:IGP) Now?

Simply Wall St
·3-min read

While Intercede Group plc (LON:IGP) might not be the most widely known stock at the moment, it saw a double-digit share price rise of over 10% in the past couple of months on the AIM. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine Intercede Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Intercede Group

Is Intercede Group still cheap?

Intercede Group appears to be expensive according to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average. I’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 40.9x is currently well-above the industry average of 33.78x, meaning that it is trading at a more expensive price relative to its peers. Furthermore, Intercede Group’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 levels around its industry peers, 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.

What does the future of Intercede Group look like?

earnings-and-revenue-growth
earnings-and-revenue-growth

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. However, with a relatively muted profit growth of 9.3% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Intercede Group, at least in the short term.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in IGP’s outlook, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe IGP should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on IGP for a while, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive growth outlook may mean it’s worth diving deeper into other factors in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. To that end, you should learn about the 2 warning signs we've spotted with Intercede Group (including 1 which is potentially serious).

If you are no longer interested in Intercede Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.