Today we're going to take a look at the well-established Aristocrat Leisure Limited (ASX:ALL). The company's stock saw a significant share price rise of 26% in the past couple of months on the ASX. The company's trading levels have reached its high for the past year, following the recent bounce in the share price. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine Aristocrat Leisure’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Aristocrat Leisure

What's The Opportunity In Aristocrat Leisure?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 3.7% below our intrinsic value, which means if you buy Aristocrat Leisure today, you’d be paying a fair price for it. And if you believe the company’s true value is A$74.30, then there’s not much of an upside to gain from mispricing. What's more, Aristocrat Leisure’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Aristocrat Leisure?

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. 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. With profit expected to grow by 44% over the next couple of years, the future seems bright for Aristocrat Leisure. 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? ALL’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 track record of its management team. 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 ALL, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

It can be quite valuable to consider what analysts expect for Aristocrat Leisure from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.