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Is Now The Time To Look At Buying Littelfuse, Inc. (NASDAQ:LFUS)?

Simply Wall St

Littelfuse, Inc. (NASDAQ:LFUS), which is in the electronic business, and is based in United States, saw a decent share price growth in the teens level on the NASDAQGS over the last few months. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today I will analyse the most recent data on Littelfuse’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Littelfuse

What is Littelfuse worth?

Littelfuse appears to be overvalued by 29% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$181 on the market compared to my intrinsic value of $140.18. This means that the opportunity to buy Littelfuse at a good price has disappeared! But, is there another opportunity to buy low in the future? Since Littelfuse’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Littelfuse?

NasdaqGS:LFUS Past and Future Earnings, December 5th 2019
NasdaqGS:LFUS Past and Future Earnings, December 5th 2019

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. Littelfuse’s earnings over the next few years are expected to increase by 40%, indicating a highly optimistic future ahead. This should lead to more robust 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 LFUS’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 LFUS 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 LFUS 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 LFUS, which means it’s worth diving deeper into other factors 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 Littelfuse. You can find everything you need to know about Littelfuse in the latest infographic research report. If you are no longer interested in Littelfuse, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.