Morgan Advanced Materials plc (LON:MGAM), is not the largest company out there, but it received a lot of attention from a substantial price movement on the LSE over the last few months, increasing to UK￡3.42 at one point, and dropping to the lows of UK￡2.56. 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 Morgan Advanced Materials' current trading price of UK￡2.60 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 Morgan Advanced Materials’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Morgan Advanced Materials

What Is Morgan Advanced Materials Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 8.91% above our intrinsic value, which means if you buy Morgan Advanced Materials today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth ￡2.39, then there isn’t really any room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Morgan Advanced Materials’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from Morgan Advanced Materials?

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. Morgan Advanced Materials' earnings over the next few years are expected to increase by 39%, 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 MGAM’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?