FDM Group (Holdings) plc (LON:FDM), is not the largest company out there, but it led the LSE gainers with a relatively large price hike in the past couple of weeks. While good news for shareholders, the company has traded much higher in the past year. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine FDM Group (Holdings)’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for FDM Group (Holdings)

Is FDM Group (Holdings) Still Cheap?

According to our valuation model, the stock is currently overvalued by about 23%, trading at UK￡3.94 compared to our intrinsic value of ￡3.20. This means that the opportunity to buy FDM Group (Holdings) at a good price has disappeared! In addition to this, it seems like FDM Group (Holdings)’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What kind of growth will FDM Group (Holdings) generate?

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 an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for FDM Group (Holdings), at least in the near future.

What This Means For You

Are you a shareholder? If you believe FDM is currently trading above its value, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the risk from a negative growth outlook, this could be the right time to de-risk your portfolio. 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 tabs on FDM for some time, now may not be the best time to enter into the stock. you may want to reconsider buying the stock at this time. Its price has risen beyond its true value, on top of a negative future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?