discoverIE Group plc (LON:DSCV), is not the largest company out there, but it saw significant share price movement during recent months on the LSE, rising to highs of UK￡7.57 and falling to the lows of UK￡6.71. 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 discoverIE Group's current trading price of UK￡7.31 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 discoverIE Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for discoverIE Group

What's The Opportunity In discoverIE Group?

According to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average, the stock currently looks expensive. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that discoverIE Group’s ratio of 45.25x is above its peer average of 19.46x, which suggests the stock is trading at a higher price compared to the Electrical industry. But, is there another opportunity to buy low in the future? Since discoverIE Group’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will discoverIE Group generate?

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. With profit expected to grow by 78% over the next couple of years, the future seems bright for discoverIE Group. 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? It seems like the market has well and truly priced in DSCV’s positive outlook, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe DSCV should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.