While Shearwater Group plc (LON:SWG) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the AIM over the last few months. As a small cap stock, which tends to lack high analyst coverage, 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 Shearwater Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for Shearwater Group
What is Shearwater Group worth?
According to my price multiple model, which makes a comparison between the company’s price-to-earnings ratio and the industry average, the stock price seems to be justfied. 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 41.56x is currently trading slightly above its industry peers’ ratio of 40.7x, which means if you buy Shearwater Group today, you’d…
