While Kainos Group plc (LON:KNOS) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the LSE. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today we will analyse the most recent data on Kainos Group’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Kainos Group

What's The Opportunity In Kainos Group?

According to our valuation model, Kainos Group seems to be fairly priced at around 4.2% below our intrinsic value, which means if you buy Kainos Group today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth ￡11.08, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, Kainos Group has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from Kainos Group?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Kainos Group's earnings over the next few years are expected to increase by 48%, 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 KNOS’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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on KNOS, 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.