Is It Time To Consider Buying Guangzhou Tinci Materials Technology Co., Ltd. (SZSE:002709)?

Guangzhou Tinci Materials Technology Co., Ltd. (SZSE:002709), is not the largest company out there, but it received a lot of attention from a substantial price movement on the SZSE over the last few months, increasing to CN¥25.55 at one point, and dropping to the lows of CN¥18.40. 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 Guangzhou Tinci Materials Technology's current trading price of CN¥19.66 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 Guangzhou Tinci Materials Technology’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Guangzhou Tinci Materials Technology

Is Guangzhou Tinci Materials Technology Still Cheap?

According to our valuation model, Guangzhou Tinci Materials Technology seems to be fairly priced at around 16% below our intrinsic value, which means if you buy Guangzhou Tinci Materials Technology today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth CN¥23.44, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Guangzhou Tinci Materials Technology’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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.

What kind of growth will Guangzhou Tinci Materials Technology 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. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Guangzhou Tinci Materials Technology's earnings over the next few years are expected to increase by 92%, 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? It seems like the market has already priced in 002709’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 tabs on 002709, 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 diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Guangzhou Tinci Materials Technology, you'd also look into what risks it is currently facing. At Simply Wall St, we found 2 warning signs for Guangzhou Tinci Materials Technology and we think they deserve your attention.

If you are no longer interested in Guangzhou Tinci Materials 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.