When Should You Buy Valmet Oyj (HEL:VALMT)?

While Valmet Oyj (HEL:VALMT) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the HLSE over the last few months, increasing to €24.71 at one point, and dropping to the lows of €22.19. 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 Valmet Oyj's current trading price of €23.81 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 Valmet Oyj’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Valmet Oyj

What's the opportunity in Valmet Oyj?

According to my valuation model, Valmet Oyj seems to be fairly priced at around 4.96% above my intrinsic value, which means if you buy Valmet Oyj today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth €22.68, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, Valmet Oyj has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from Valmet Oyj?

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. Valmet Oyj’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? VALMT’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. 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 the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on VALMT, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect 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.

If you want to dive deeper into Valmet Oyj, you'd also look into what risks it is currently facing. For example - Valmet Oyj has 1 warning sign we think you should be aware of.

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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. 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.
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