Is Now The Time To Look At Buying Freshii Inc. (TSE:FRII)?

Freshii Inc. (TSE:FRII), is not the largest company out there, but it saw a significant share price rise of over 20% in the past couple of months on the TSX. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Today I will analyse the most recent data on Freshii’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Freshii

What's the opportunity in Freshii?

Good news, investors! Freshii is still a bargain right now. My valuation model shows that the intrinsic value for the stock is CA$2.60, but it is currently trading at CA$1.59 on the share market, meaning that there is still an opportunity to buy now. However, given that Freshii’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 does the future of Freshii look like?

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. However, with a relatively muted revenue growth of 10.0% expected in the upcoming year, short term growth doesn’t seem like a key driver for a buy decision for Freshii.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since FRII is currently undervalued, it may be a great time to increase 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 FRII 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 FRII. 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.

If you'd like to know more about Freshii as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Freshii, and understanding this should be part of your investment process.

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This article by Simply Wall St is general in nature. 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.
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