At HK$12.52, Is It Time To Put Geely Automobile Holdings Limited (HKG:175) On Your Watch List?

Today we're going to take a look at the well-established Geely Automobile Holdings Limited (HKG:175). The company's stock saw significant share price movement during recent months on the SEHK, rising to highs of HK$16.34 and falling to the lows of HK$12.52. 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 Geely Automobile Holdings's current trading price of HK$12.52 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Geely Automobile Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Geely Automobile Holdings

What's the opportunity in Geely Automobile Holdings?

Good news, investors! Geely Automobile Holdings is still a bargain right now. My valuation model shows that the intrinsic value for the stock is HK$19.86, but it is currently trading at HK$12.52 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Geely Automobile Holdings’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 Geely Automobile Holdings 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. 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. Geely Automobile Holdings’s earnings over the next few years are expected to increase by 35%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since 175 is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic 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 undervaluation.

Are you a potential investor? If you’ve been keeping an eye on 175 for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 175. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Geely Automobile Holdings. You can find everything you need to know about Geely Automobile Holdings in the latest infographic research report. If you are no longer interested in Geely Automobile Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.