Rotork plc (LON:ROR), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the LSE. The company's trading levels have approached the yearly peak, following the recent bounce in the share price. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine Rotork’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Rotork

Is Rotork Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 19.96% above our intrinsic value, which means if you buy Rotork today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is ￡2.86, there’s only an insignificant downside when the price falls to its real value. Furthermore, Rotork’s low beta implies that the stock is less volatile than the wider market.

What does the future of Rotork look like?

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. With profit expected to grow by 28% over the next couple of years, the future seems bright for Rotork. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? ROR’s optimistic future growth appears to have been factored into the current share price, 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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on ROR, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Rotork.