While Ganzhou Tengyuan Cobalt New Material Co., Ltd. (SZSE:301219) might not have the largest market cap around , it received a lot of attention from a substantial price increase on the SZSE over the last few months. While good news for shareholders, the company has traded much higher in the past year. As a CN¥15b market-cap stock, it seems odd Ganzhou Tengyuan Cobalt New Material is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Let's take a look at Ganzhou Tengyuan Cobalt New Material's outlook and value based on the most recent financial data to see if the opportunity still exists.

What Is Ganzhou Tengyuan Cobalt New Material Worth?

Great news for investors – Ganzhou Tengyuan Cobalt New Material is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We've used the price-to-earnings ratio in this instance because there's not enough visibility to forecast its cash flows. The stock's ratio of 20.07x is currently well-below the industry average of 34.26x, meaning that it is trading at a cheaper price relative to its peers. What's more interesting is that, Ganzhou Tengyuan Cobalt New Material's share price is quite stable, which could mean two things: firstly, it may take the share price a while to move closer to its industry peers, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What kind of growth will Ganzhou Tengyuan Cobalt New Material generate?

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 67% over the next couple of years, the future seems bright for Ganzhou Tengyuan Cobalt New Material. 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 301219 is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. With an optimistic 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 301219 for a while, now might be the time to make a leap. Its buoyant future profit outlook isn't fully reflected in the current share price yet, which means it's not too late to buy 301219. 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.

So while earnings quality is important, it's equally important to consider the risks facing Ganzhou Tengyuan Cobalt New Material at this point in time. Case in point: We've spotted 3 warning signs for Ganzhou Tengyuan Cobalt New Material you should be mindful of and 1 of them shouldn't be ignored.

If you are no longer interested in Ganzhou Tengyuan Cobalt New Material, 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.