Qingdao Haier Biomedical Co.,Ltd (SHSE:688139), might not be a large cap stock, but it saw significant share price movement during recent months on the SHSE, rising to highs of CN¥42.98 and falling to the lows of CN¥31.62. 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 Qingdao Haier BiomedicalLtd's current trading price of CN¥31.77 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 Qingdao Haier BiomedicalLtd's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

What Is Qingdao Haier BiomedicalLtd Worth?

According to our price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. In this instance, we've used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock's cash flows. We find that Qingdao Haier BiomedicalLtd's ratio of 24.69x is trading slightly below its industry peers' ratio of 25.96x, which means if you buy Qingdao Haier BiomedicalLtd today, you'd be paying a reasonable price for it. And if you believe that Qingdao Haier BiomedicalLtd should be trading at this level in the long run, then there's not much of an upside to gain over and above other industry peers. Furthermore, it seems like Qingdao Haier BiomedicalLtd's share price is quite stable, which means there may be less chances to buy low in the future now that it's priced similarly to industry peers. This is because the stock is less volatile than the wider market given its low beta.

What does the future of Qingdao Haier BiomedicalLtd look like?

Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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 80% over the next couple of years, the future seems bright for Qingdao Haier BiomedicalLtd. 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? 688139's optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. 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 688139? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you've been keeping an eye on 688139, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for 688139, 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.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example - Qingdao Haier BiomedicalLtd has 1 warning sign we think you should be aware of.

If you are no longer interested in Qingdao Haier BiomedicalLtd, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com