Sinoma Science & Technology Co.,Ltd. (SZSE:002080), might not be a large cap stock, but it saw significant share price movement during recent months on the SZSE, rising to highs of CN¥23.13 and falling to the lows of CN¥16.79. 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 Sinoma Science & TechnologyLtd's current trading price of CN¥17.01 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at Sinoma Science & TechnologyLtd's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Sinoma Science & TechnologyLtd
What's The Opportunity In Sinoma Science & TechnologyLtd?
Good news, investors! Sinoma Science & TechnologyLtd is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, I've used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock's cash flows. I find that Sinoma Science & TechnologyLtd's ratio of 10.24x is below its peer average of 32.21x, which indicates the stock is trading at a lower price compared to the Chemicals industry. Although, there may be another chance to buy again in the future. This is because Sinoma Science & TechnologyLtd's beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What kind of growth will Sinoma Science & TechnologyLtd 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. With profit expected to grow by 64% over the next couple of years, the future seems bright for Sinoma Science & TechnologyLtd. 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 002080 is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. With a positive profit 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 price multiple.
Are you a potential investor? If you've been keeping an eye on 002080 for a while, now might be the time to make a leap. Its prosperous future profit outlook isn't fully reflected in the current share price yet, which means it's not too late to buy 002080. 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 investment decision.
If you want to dive deeper into Sinoma Science & TechnologyLtd, you'd also look into what risks it is currently facing. To that end, you should learn about the 3 warning signs we've spotted with Sinoma Science & TechnologyLtd (including 2 which are significant).
If you are no longer interested in Sinoma Science & TechnologyLtd, 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.
