Should You Investigate Ambipar Participações e Empreendimentos S.A. (BVMF:AMBP3) At R$269?

Ambipar Participações e Empreendimentos S.A. (BVMF:AMBP3), might not be a large cap stock, but it saw a significant share price rise of 320% in the past couple of months on the BOVESPA. The recent jump in the share price has meant that the company is trading at close to its 52-week high. As a well-established company, which tends to be well-covered by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine Ambipar Participações e Empreendimentos’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Ambipar Participações e Empreendimentos

What Is Ambipar Participações e Empreendimentos Worth?

Good news, investors! Ambipar Participações e Empreendimentos is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is R$387.67, but it is currently trading at R$269 on the share market, meaning that there is still an opportunity to buy now. However, given that Ambipar Participações e Empreendimentos’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Ambipar Participações e Empreendimentos 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. With revenues expected to grow by a double-digit 24% over the next couple of years, the outlook is positive for Ambipar Participações e Empreendimentos. If the level of expenses is able to be maintained, 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 AMBP3 is currently undervalued, it may be a great time to increase 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 financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on AMBP3 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 AMBP3. 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.

So while earnings quality is important, it's equally important to consider the risks facing Ambipar Participações e Empreendimentos at this point in time. In terms of investment risks, we've identified 2 warning signs with Ambipar Participações e Empreendimentos, and understanding these should be part of your investment process.

If you are no longer interested in Ambipar Participações e Empreendimentos, 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.