Is It Too Late To Consider Buying Zoomlion Heavy Industry Science and Technology Co., Ltd. (SZSE:000157)?

Zoomlion Heavy Industry Science and Technology Co., Ltd. (SZSE:000157), is not the largest company out there, but it saw significant share price movement during recent months on the SZSE, rising to highs of CN¥9.35 and falling to the lows of CN¥7.16. 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 Zoomlion Heavy Industry Science and Technology's current trading price of CN¥7.30 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 Zoomlion Heavy Industry Science and Technology’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 Zoomlion Heavy Industry Science and Technology

What Is Zoomlion Heavy Industry Science and Technology Worth?

Great news for investors – Zoomlion Heavy Industry Science and Technology is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 17.54x is currently well-below the industry average of 26.62x, meaning that it is trading at a cheaper price relative to its peers. Zoomlion Heavy Industry Science and Technology’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its industry peers, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What kind of growth will Zoomlion Heavy Industry Science and Technology generate?

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. Zoomlion Heavy Industry Science and Technology's earnings over the next few years are expected to increase by 65%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since 000157 is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. With a positive profit 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 capital structure to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on 000157 for a while, now might be the time to enter the stock. Its prosperous future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 000157. 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 assessment.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example - Zoomlion Heavy Industry Science and Technology has 3 warning signs we think you should be aware of.

If you are no longer interested in Zoomlion Heavy Industry Science and Technology, 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.

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