Is Now The Time To Look At Buying XRF Scientific Limited (ASX:XRF)?

XRF Scientific Limited (ASX:XRF), 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 ASX. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine XRF Scientific’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for XRF Scientific

Is XRF Scientific Still Cheap?

According to our valuation model, XRF Scientific seems to be fairly priced at around 7.3% below our intrinsic value, which means if you buy XRF Scientific today, you’d be paying a fair price for it. And if you believe that the stock is really worth A$1.22, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, XRF Scientific’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will XRF Scientific generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 21% over the next couple of years, the future seems bright for XRF Scientific. 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? XRF’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 an eye on XRF, 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.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. While conducting our analysis, we found that XRF Scientific has 1 warning sign and it would be unwise to ignore this.

If you are no longer interested in XRF Scientific, 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.