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

Vibra Energia S.A. (BVMF:VBBR3), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the BOVESPA over the last few months, increasing to R$19.16 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$16.68 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.

Our analysis indicates that VBBR3 is potentially undervalued!

Is Vibra Energia Still Cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 16% below my intrinsic value, which means if you buy Vibra Energia today, you’d be paying a fair price for it. And if you believe the company’s true value is R$19.87, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, Vibra Energia has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Vibra Energia 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. 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 3.5% 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? VBBR3’s 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 track record of its management team. 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 VBBR3, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example, Vibra Energia has 3 warning signs (and 1 which can't be ignored) we think you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.