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What Does 21Vianet Group Inc’s (VNET) Share Price Indicate?

Bryson Sharp

21Vianet Group Inc (NASDAQ:VNET), a software and services company based in China, View our latest analysis for 21Vianet Group

What is VNET worth?

Great news for investors – VNET is still trading at a fairly cheap price. In this instance, I’ve used price-to-book ratio (PB) ratio given that there is not enough information to reliably forecast the stock’s cash flows, and its earnings doesn’t seem to reflect its true value. I find that VNET’s ratio of 0.7x is below its peer average of 6.2x, which suggests the stock is undervalued compared to the software and services industry. However, given that VNET’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 kind of growth will VNET generate?

NasdaqGS:VNET Future Profit Sep 13th 17

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 VNET future expectations. With profit expected to grow by 61.63% over the next couple of years, the future seems bright for VNET. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? Since VNET is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on VNET for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy VNET. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on 21Vianet Group. You can find everything you need to know about VNET in the latest infographic research report. If you are no longer interested in 21Vianet Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.