While Temple & Webster Group Ltd (ASX:TPW) might not have the largest market cap around , it saw a significant share price rise of 52% in the past couple of months on the ASX. The company is inching closer to its yearly highs following the recent share price climb. 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 Temple & Webster Group’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Temple & Webster Group

Is Temple & Webster Group Still Cheap?

Temple & Webster Group appears to be overvalued by 23% at the moment, based on our discounted cash flow valuation. The stock is currently priced at AU$17.23 on the market compared to our intrinsic value of A$14.00. Not the best news for investors looking to buy! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Temple & Webster Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Temple & Webster Group look like?

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. Temple & Webster Group's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in TPW’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe TPW should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on TPW for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for TPW, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Temple & Webster Group, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Temple & Webster Group has 1 warning sign and it would be unwise to ignore this.

If you are no longer interested in Temple & Webster Group, 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.