What Is Gateley (Holdings) Plc's (LON:GTLY) Share Price Doing?

Source: Yahoo! Finance

Gateley (Holdings) Plc (LON:GTLY), might not be a large cap stock, but it saw significant share price movement during recent months on the AIM, rising to highs of UK£1.45 and falling to the lows of UK£1.18. 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 Gateley (Holdings)'s current trading price of UK£1.20 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 Gateley (Holdings)'s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Gateley (Holdings)

Good news, investors! Gateley (Holdings) is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. 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 Gateley (Holdings)'s ratio of 11.51x is below its peer average of 19.59x, which indicates the stock is trading at a lower price compared to the Professional Services industry. Gateley (Holdings)'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 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.

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. However, with a negative profit growth of -2.7% expected over the next couple of years, near-term growth certainly doesn't appear to be a driver for a buy decision for Gateley (Holdings). This certainty tips the risk-return scale towards higher risk.

Are you a shareholder? Although GTLY is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. We recommend you think about whether you want to increase your portfolio exposure to GTLY, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you've been keeping an eye on GTLY for a while, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you'd like to know more about Gateley (Holdings) as a business, it's important to be aware of any risks it's facing. For example, we've discovered 5 warning signs that you should run your eye over to get a better picture of Gateley (Holdings).

If you are no longer interested in Gateley (Holdings), you can use our free platform to see our list of over 50 other stocks with a high growth potential.