Have Investors Already Priced In Baozun Inc’s (BZUN) Growth?
Baozun Inc (NASDAQ:BZUN), a internet software and services company based in China, received a lot of attention from a substantial price increase on the NasdaqGS in the over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine BZUN’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. View our latest analysis for Baozun
What is BZUN worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 5% below my intrinsic value, which means if you buy BZUN today, you’d be paying a reasonable price for it. And if you believe that BZUN is really worth $33.87, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that BZUN’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will BZUN generate?
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. BZUN’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 already priced in BZUN’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at BZUN? 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 BZUN, 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 BZUN, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Baozun. You can find everything you need to know about BZUN in the latest infographic research report. If you are no longer interested in Baozun, 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.
