Should You Think About Buying Vestas Wind Systems A/S (CPH:VWS) Now?

Today we're going to take a look at the well-established Vestas Wind Systems A/S (CPH:VWS). The company's stock received a lot of attention from a substantial price increase on the CPSE over the last few months. The recent share price gains has brought the company back closer to 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, could the stock still be trading at a relatively cheap price? Today we will analyse the most recent data on Vestas Wind Systems’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Vestas Wind Systems

Is Vestas Wind Systems Still Cheap?

Great news for investors – Vestas Wind Systems is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is DKK332.52, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Vestas Wind Systems’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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 Vestas Wind Systems generate?

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. In Vestas Wind Systems' case, its revenues over the next few years are expected to grow by 38%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since VWS is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on VWS for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy VWS. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

If you'd like to know more about Vestas Wind Systems as a business, it's important to be aware of any risks it's facing. For example - Vestas Wind Systems has 1 warning sign we think you should be aware of.

If you are no longer interested in Vestas Wind Systems, 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.