Why Vibra Energia S.A. (BVMF:VBBR3) Could Be Worth Watching

While Vibra Energia S.A. (BVMF:VBBR3) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the BOVESPA over the last few months, increasing to R$23.18 at one point, and dropping to the lows of R$16.13. 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 Vibra Energia's current trading price of R$16.84 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 Vibra Energia’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 Vibra Energia

What's the opportunity in Vibra Energia?

Great news for investors – Vibra Energia is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is R$23.52, but it is currently trading at R$16.84 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Vibra Energia’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

Can we expect growth from Vibra Energia?

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 5.4% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Vibra Energia, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since VBBR3 is currently undervalued, it may be a great time to increase your holdings in the stock. 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 VBBR3 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 VBBR3. 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 buy.

So while earnings quality is important, it's equally important to consider the risks facing Vibra Energia at this point in time. When we did our research, we found 3 warning signs for Vibra Energia (1 shouldn't be ignored!) that we believe deserve your full attention.

If you are no longer interested in Vibra Energia, 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.