Is Jason Furniture (Hangzhou) Co.,Ltd. (SHSE:603816) Potentially Undervalued?

While Jason Furniture (Hangzhou) Co.,Ltd. (SHSE:603816) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the SHSE. 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 mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at Jason Furniture (Hangzhou)Ltd’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Jason Furniture (Hangzhou)Ltd

What Is Jason Furniture (Hangzhou)Ltd Worth?

According to our valuation model, Jason Furniture (Hangzhou)Ltd seems to be fairly priced at around 0.05% above our intrinsic value, which means if you buy Jason Furniture (Hangzhou)Ltd today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is CN¥38.51, then there isn’t really any room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Jason Furniture (Hangzhou)Ltd’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from Jason Furniture (Hangzhou)Ltd?

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. Jason Furniture (Hangzhou)Ltd's earnings over the next few years are expected to increase by 39%, 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? 603816’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. 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 tabs on 603816, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Every company has risks, and we've spotted 1 warning sign for Jason Furniture (Hangzhou)Ltd you should know about.

If you are no longer interested in Jason Furniture (Hangzhou)Ltd, 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.