Is Harvia Oyj (HEL:HARVIA) Potentially Undervalued?

Harvia Oyj (HEL:HARVIA), is not the largest company out there, but it received a lot of attention from a substantial price movement on the HLSE over the last few months, increasing to €60.00 at one point, and dropping to the lows of €48.05. 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 Harvia Oyj's current trading price of €48.05 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 Harvia Oyj’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 Harvia Oyj

What's the opportunity in Harvia Oyj?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 10% below my intrinsic value, which means if you buy Harvia Oyj today, you’d be paying a reasonable price for it. And if you believe the company’s true value is €53.50, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that Harvia Oyj’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Harvia Oyj?

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. Harvia Oyj's earnings over the next few years are expected to increase by 56%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has already priced in HARVIA’s positive outlook, 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 HARVIA, 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.

If you'd like to know more about Harvia Oyj as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Harvia Oyj, and understanding it should be part of your investment process.

If you are no longer interested in Harvia 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.