Is Chongqing Changan Automobile Company Limited (SZSE:000625) Potentially Undervalued?

Chongqing Changan Automobile Company Limited (SZSE:000625) saw significant share price movement during recent months on the SZSE, rising to highs of CN¥14.18 and falling to the lows of CN¥12.40. 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 Chongqing Changan Automobile's current trading price of CN¥12.97 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Chongqing Changan Automobile’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Is Chongqing Changan Automobile Still Cheap?

Good news, investors! Chongqing Changan Automobile is still a bargain right now. According to our valuation, the intrinsic value for the stock is CN¥21.27, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Chongqing Changan Automobile’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

View our latest analysis for Chongqing Changan Automobile

What does the future of Chongqing Changan Automobile look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 profit expected to grow by 23% over the next couple of years, the future seems bright for Chongqing Changan Automobile. 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? Since 000625 is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. 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 000625 for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 000625. 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.

If you want to dive deeper into Chongqing Changan Automobile, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 3 warning signs for Chongqing Changan Automobile (of which 1 doesn't sit too well with us!) you should know about.

If you are no longer interested in Chongqing Changan Automobile, 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.