Is Now The Time To Look At Buying Beijing Beimo High-tech Frictional Material Co.,Ltd (SZSE:002985)?

While Beijing Beimo High-tech Frictional Material Co.,Ltd (SZSE:002985) might not have the largest market cap around , it saw a significant share price rise of 30% in the past couple of months on the SZSE. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a small cap stock, hardly covered by any analysts, 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? Let’s take a look at Beijing Beimo High-tech Frictional MaterialLtd’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Beijing Beimo High-tech Frictional MaterialLtd

What's The Opportunity In Beijing Beimo High-tech Frictional MaterialLtd?

Good news, investors! Beijing Beimo High-tech Frictional MaterialLtd is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Beijing Beimo High-tech Frictional MaterialLtd’s ratio of 27.85x is below its peer average of 62.56x, which indicates the stock is trading at a lower price compared to the Aerospace & Defense industry. What’s more interesting is that, Beijing Beimo High-tech Frictional MaterialLtd’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move closer to its industry peers, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What kind of growth will Beijing Beimo High-tech Frictional MaterialLtd 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. 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. Beijing Beimo High-tech Frictional MaterialLtd's earnings over the next few years are expected to increase by 51%, 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 002985 is currently below the industry PE ratio, it may be a great time to increase your holdings in the stock. With an optimistic 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 price multiple.

Are you a potential investor? If you’ve been keeping an eye on 002985 for a while, now might be the time to enter the stock. Its buoyant future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 002985. 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 investment decision.

It can be quite valuable to consider what analysts expect for Beijing Beimo High-tech Frictional MaterialLtd from their most recent forecasts. Luckily, you can check out what analysts are forecasting by clicking here.

If you are no longer interested in Beijing Beimo High-tech Frictional MaterialLtd, 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.