When Should You Buy Amlogic (Shanghai) Co.,Ltd. (SHSE:688099)?

While Amlogic (Shanghai) Co.,Ltd. (SHSE:688099) might not have the largest market cap around , it received a lot of attention from a substantial price increase on the SHSE over the last few months. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine Amlogic (Shanghai)Ltd’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Amlogic (Shanghai)Ltd

What Is Amlogic (Shanghai)Ltd Worth?

According to our valuation model, Amlogic (Shanghai)Ltd seems to be fairly priced at around 14.80% above our intrinsic value, which means if you buy Amlogic (Shanghai)Ltd today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is CN¥48.74, there’s only an insignificant downside when the price falls to its real value. In addition to this, Amlogic (Shanghai)Ltd has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Amlogic (Shanghai)Ltd 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. Amlogic (Shanghai)Ltd's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger 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 688099’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 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 688099, now may not be the most optimal 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 Amlogic (Shanghai)Ltd, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 1 warning sign with Amlogic (Shanghai)Ltd, and understanding this should be part of your investment process.

If you are no longer interested in Amlogic (Shanghai)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.