While NAHL Group Plc (LON:NAH) 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 AIM. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today we will analyse the most recent data on NAHL Group’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for NAHL Group

What's The Opportunity In NAHL 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 NAHL Group’s ratio of 70.53x is above its peer average of 18x, which suggests the stock is trading at a higher price compared to the Media industry. Furthermore, NAHL Group’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach levels around its industry peers, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

Can we expect growth from NAHL Group?

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. Though in the case of NAHL Group, it is expected to deliver a relatively unexciting top-line growth of 0.8% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in NAH’s outlook, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe NAH 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.