Sky Solar Holdings Ltd (NASDAQ:SKYS), a renewable energy company based in Hong Kong, saw a double-digit share price rise of over 10% in the past couple of months on the NasdaqCM. As a small cap stock, hardly covered by any analysts, 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? Today I will analyse the most recent data on Sky Solar Holdings’s outlook and valuation to see if the opportunity still exists. Check out our latest analysis for Sky Solar Holdings
Is Sky Solar Holdings still cheap?
Great news for investors – Sky Solar Holdings is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $28.52, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Sky Solar Holdings’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 Sky Solar Holdings generate?
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. In Sky Solar Holdings’s case, its revenues are expected to grow by 51.59% over the next year, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since SKYS 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 SKYS 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 SKYS. 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 Sky Solar Holdings. You can find everything you need to know about Sky Solar Holdings in the latest infographic research report. If you are no longer interested in Sky Solar Holdings, 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.