When Should You Buy OPT Machine Vision Tech Co., Ltd. (SHSE:688686)?

OPT Machine Vision Tech Co., Ltd. (SHSE:688686), is not the largest company out there, but it led the SHSE 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 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? Today we will analyse the most recent data on OPT Machine Vision Tech’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for OPT Machine Vision Tech

What Is OPT Machine Vision Tech Worth?

OPT Machine Vision Tech is currently expensive based on our price multiple model, where we look at the company's price-to-earnings ratio in comparison to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that OPT Machine Vision Tech’s ratio of 75.81x is above its peer average of 47.52x, which suggests the stock is trading at a higher price compared to the Electronic industry. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since OPT Machine Vision Tech’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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 OPT Machine Vision Tech 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. With profit expected to more than double over the next couple of years, the future seems bright for OPT Machine Vision Tech. 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 688686’s positive outlook, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe 688686 should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio 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 an eye on 688686 for a while, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for 688686, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into OPT Machine Vision Tech, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 2 warning signs with OPT Machine Vision Tech, and understanding them should be part of your investment process.

If you are no longer interested in OPT Machine Vision Tech, 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.