What Is 5N Plus Inc.'s (TSE:VNP) Share Price Doing?

While 5N Plus Inc. (TSE:VNP) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the TSX, rising to highs of CA$3.19 and falling to the lows of CA$2.61. 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 5N Plus' current trading price of CA$2.73 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at 5N Plus’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for 5N Plus

Is 5N Plus still cheap?

According to my valuation model, 5N Plus seems to be fairly priced at around 16% below my intrinsic value, which means if you buy 5N Plus today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth CA$3.25, then there’s not much of an upside to gain from mispricing. Furthermore, 5N Plus’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from 5N Plus?

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 43% over the next couple of years, the future seems bright for 5N Plus. 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? It seems like the market has already priced in VNP’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. 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 an eye on VNP, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Diving deeper into the forecasts for 5N Plus mentioned earlier will help you understand how analysts view the stock going forward. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in 5N Plus, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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.

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