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Is It Time To Consider Buying Systemair AB (publ) (STO:SYSR)?

Simply Wall St

Systemair AB (publ) (STO:SYSR), which is in the building business, and is based in Sweden, received a lot of attention from a substantial price increase on the OM over the last few months. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine Systemair’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Systemair

What is Systemair worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 4.8% below my intrinsic value, which means if you buy Systemair today, you’d be paying a fair price for it. And if you believe the company’s true value is SEK186.97, then there’s not much of an upside to gain from mispricing. What's more, Systemair’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of Systemair look like?

OM:SYSR Past and Future Earnings, December 21st 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. Systemair’s earnings over the next few years are expected to increase by 39%, 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 already priced in SYSR’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 track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on SYSR, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into 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 Systemair. You can find everything you need to know about Systemair in the latest infographic research report. If you are no longer interested in Systemair, 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.