When Should You Buy Wuhan Raycus Fiber Laser Technologies Co.,Ltd. (SZSE:300747)?

Wuhan Raycus Fiber Laser Technologies Co.,Ltd. (SZSE:300747), is not the largest company out there, but it saw significant share price movement during recent months on the SZSE, rising to highs of CN¥21.66 and falling to the lows of CN¥16.76. 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 Wuhan Raycus Fiber Laser TechnologiesLtd's current trading price of CN¥16.76 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Wuhan Raycus Fiber Laser TechnologiesLtd’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 Wuhan Raycus Fiber Laser TechnologiesLtd

What Is Wuhan Raycus Fiber Laser TechnologiesLtd Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 7.26% above our intrinsic value, which means if you buy Wuhan Raycus Fiber Laser TechnologiesLtd today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is CN¥15.63, there’s only an insignificant downside when the price falls to its real value. Furthermore, Wuhan Raycus Fiber Laser TechnologiesLtd’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will Wuhan Raycus Fiber Laser TechnologiesLtd generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Wuhan Raycus Fiber Laser TechnologiesLtd'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? 300747’s optimistic future growth appears to have been factored into the current share price, 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 an eye on 300747, 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.

So while earnings quality is important, it's equally important to consider the risks facing Wuhan Raycus Fiber Laser TechnologiesLtd at this point in time. Case in point: We've spotted 2 warning signs for Wuhan Raycus Fiber Laser TechnologiesLtd you should be aware of.

If you are no longer interested in Wuhan Raycus Fiber Laser TechnologiesLtd, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com