Is Now The Time To Look At Buying iSoftStone Information Technology (Group) Co., Ltd. (SZSE:301236)?

While iSoftStone Information Technology (Group) Co., Ltd. (SZSE:301236) might not have the largest market cap around , it led the SZSE gainers with a relatively large price hike in the past couple of weeks. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. 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 iSoftStone Information Technology (Group)’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for iSoftStone Information Technology (Group)

What Is iSoftStone Information Technology (Group) Worth?

According to our valuation model, the stock is currently overvalued by about 35%, trading at CN¥46.48 compared to our intrinsic value of CN¥34.47. This means that the buying opportunity has probably disappeared for now. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that iSoftStone Information Technology (Group)’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from iSoftStone Information Technology (Group)?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to more than double over the next couple of years, the future seems bright for iSoftStone Information Technology (Group). It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in 301236’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe 301236 should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on 301236 for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for 301236, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about iSoftStone Information Technology (Group) as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 2 warning signs for iSoftStone Information Technology (Group) (of which 1 is potentially serious!) you should know about.

If you are no longer interested in iSoftStone Information Technology (Group), 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.