While Good Energy Group PLC (LON:GOOD) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the AIM over the last few months, increasing to UK￡3.10 at one point, and dropping to the lows of UK￡2.50. 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 Good Energy Group's current trading price of UK￡2.58 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 Good Energy Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Good Energy Group

What's The Opportunity In Good Energy Group?

The share price seems sensible at the moment according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We’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 16.32x is currently trading slightly below its industry peers’ ratio of 17.38x, which means if you buy Good Energy Group today, you’d be paying a decent price for it. And if you believe that Good Energy Group should be trading at this level in the long run, then there’s not much of an upside to gain over and above other industry peers. Furthermore, Good Energy Group’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.

Can we expect growth from Good Energy Group?

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. Good Energy Group's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger 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 GOOD’s positive outlook, with shares trading around industry price multiples. 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 GOOD? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?