Should You Investigate Ascential plc (LON:ASCL) At UK£3.58?

Simply Wall St

While Ascential plc (LON:ASCL) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price increase on the LSE over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Ascential’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Ascential

Is Ascential still cheap?

According to my valuation model, Ascential seems to be fairly priced at around 7.38% above my intrinsic value, which means if you buy Ascential today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth £3.34, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Ascential’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of Ascential look like?

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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. In the upcoming year, Ascential's earnings are expected to increase by 70%, 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 ASCL’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 financial strength of the company. 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 an eye on ASCL, now may not be the most optimal 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Ascential, you'd also look into what risks it is currently facing. For example, Ascential has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.

If you are no longer interested in Ascential, 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.

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