When Should You Buy Foxconn Industrial Internet Co., Ltd. (SHSE:601138)?

Let's talk about the popular Foxconn Industrial Internet Co., Ltd. (SHSE:601138). The company's shares led the SHSE gainers with a relatively large price hike in the past couple of weeks. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today we will analyse the most recent data on Foxconn Industrial Internet’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Foxconn Industrial Internet

What Is Foxconn Industrial Internet Worth?

According to our valuation model, the stock is currently overvalued by about 30%, trading at CN¥21.92 compared to our intrinsic value of CN¥16.90. This means that the buying opportunity has probably disappeared for now. In addition to this, it seems like Foxconn Industrial Internet’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, 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 does the future of Foxconn Industrial Internet look like?

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. With profit expected to grow by 65% over the next couple of years, the future seems bright for Foxconn Industrial Internet. 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? 601138’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe 601138 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 601138 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 positive outlook is encouraging for 601138, 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 Foxconn Industrial Internet as a business, it's important to be aware of any risks it's facing. At Simply Wall St, we found 2 warning signs for Foxconn Industrial Internet and we think they deserve your attention.

If you are no longer interested in Foxconn Industrial Internet, 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.