Jiangsu Xinquan Automotive Trim Co.,Ltd. (SHSE:603179), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the SHSE. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company's outlook is already priced into the stock. However, what if the stock is still a bargain? Let's take a look at Jiangsu Xinquan Automotive TrimLtd's outlook and value based on the most recent financial data to see if the opportunity still exists.

What's The Opportunity In Jiangsu Xinquan Automotive TrimLtd?

The share price seems sensible at the moment according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. 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 Jiangsu Xinquan Automotive TrimLtd's ratio of 29.88x is trading slightly above its industry peers' ratio of 27.5x, which means if you buy Jiangsu Xinquan Automotive TrimLtd today, you'd be paying a relatively reasonable price for it. And if you believe that Jiangsu Xinquan Automotive TrimLtd should be trading at this level in the long run, then there should only be a fairly immaterial downside vs other industry peers. Furthermore, Jiangsu Xinquan Automotive TrimLtd's share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.

What does the future of Jiangsu Xinquan Automotive TrimLtd 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 97% over the next couple of years, the future seems bright for Jiangsu Xinquan Automotive TrimLtd. 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? It seems like the market has already priced in 603179's positive outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven't considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at 603179? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you've been keeping tabs on 603179, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the optimistic forecast is encouraging for 603179, 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.

If you'd like to know more about Jiangsu Xinquan Automotive TrimLtd as a business, it's important to be aware of any risks it's facing. For example, we've found that Jiangsu Xinquan Automotive TrimLtd has 2 warning signs (1 is a bit unpleasant!) that deserve your attention before going any further with your analysis.

If you are no longer interested in Jiangsu Xinquan Automotive TrimLtd, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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