New Wave Group AB (publ) (STO:NEWA B), which is in the luxury business, and is based in Sweden, received a lot of attention from a substantial price movement on the OM over the last few months, increasing to kr61.40 at one point, and dropping to the lows of kr54.10. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether New Wave Group's current trading price of kr59.00 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at New Wave Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is New Wave Group still cheap?
Great news for investors – New Wave Group is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is SEK94.61, but it is currently trading at kr59.00 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, New Wave Group’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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 New Wave Group?
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. With profit expected to grow by 32% over the next couple of years, the future seems bright for New Wave Group. 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? Since NEWA B is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic 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 financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on NEWA B for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy NEWA B. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on New Wave Group. You can find everything you need to know about New Wave Group in the latest infographic research report. If you are no longer interested in New Wave Group, 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 email@example.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.
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