What Does Instituto Hermes Pardini S.A.'s (BVMF:PARD3) Share Price Indicate?

While Instituto Hermes Pardini S.A. (BVMF:PARD3) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the BOVESPA over the last few months. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine Instituto Hermes Pardini’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Instituto Hermes Pardini

Is Instituto Hermes Pardini still cheap?

Good news, investors! Instituto Hermes Pardini is still a bargain right now. My valuation model shows that the intrinsic value for the stock is R$26.46, but it is currently trading at R$19.45 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 Instituto Hermes Pardini’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 does the future of Instituto Hermes Pardini look like?

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. However, with a relatively muted profit growth of 4.0% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Instituto Hermes Pardini, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since PARD3 is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. 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 PARD3 for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy PARD3. 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.

Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Instituto Hermes Pardini, 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.