While Zhejiang Dingli Machinery Co.,Ltd (SHSE:603338) might not have the largest market cap around , it saw a decent share price growth of 11% on the SHSE over the last few months. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock's share price. But what if there is still an opportunity to buy? Let's examine Zhejiang Dingli MachineryLtd's valuation and outlook in more detail to determine if there's still a bargain opportunity.

Is Zhejiang Dingli MachineryLtd Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It's trading around 5.8% below our intrinsic value, which means if you buy Zhejiang Dingli MachineryLtd today, you'd be paying a fair price for it. And if you believe the company's true value is CN¥53.83, then there's not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Zhejiang Dingli MachineryLtd's share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Zhejiang Dingli MachineryLtd generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it's the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 36% over the next couple of years, the future seems bright for Zhejiang Dingli MachineryLtd. 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 603338'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 603338, 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example - Zhejiang Dingli MachineryLtd has 1 warning sign we think you should be aware of.

If you are no longer interested in Zhejiang Dingli MachineryLtd, 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.