Is It Time To Consider Buying Metso Outotec Oyj (HEL:MOCORP)?

Metso Outotec Oyj (HEL:MOCORP), might not be a large cap stock, but it saw a decent share price growth in the teens level on the HLSE over the last few months. 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. However, what if the stock is still a bargain? Let’s examine Metso Outotec Oyj’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Metso Outotec Oyj

What's The Opportunity In Metso Outotec Oyj?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 3.2% below my intrinsic value, which means if you buy Metso Outotec Oyj today, you’d be paying a reasonable price for it. And if you believe the company’s true value is €10.93, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Metso Outotec Oyj’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of Metso Outotec Oyj 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 64% over the next couple of years, the future seems bright for Metso Outotec Oyj. 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? MOCORP’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 confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on MOCORP, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Metso Outotec Oyj, you'd also look into what risks it is currently facing. Case in point: We've spotted 1 warning sign for Metso Outotec Oyj you should be aware of.

If you are no longer interested in Metso Outotec Oyj, 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.