At €13.70, Is Siili Solutions Oyj (HEL:SIILI) Worth Looking At Closely?

Siili Solutions Oyj (HEL:SIILI), is not the largest company out there, but it led the HLSE gainers with a relatively large price hike in the past couple of weeks. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Siili Solutions Oyj’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Siili Solutions Oyj

What is Siili Solutions Oyj worth?

According to my valuation model, Siili Solutions Oyj seems to be fairly priced at around 4.2% below my intrinsic value, which means if you buy Siili Solutions Oyj today, you’d be paying a fair price for it. And if you believe the company’s true value is €14.30, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Siili Solutions Oyj’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Siili Solutions Oyj 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. Siili Solutions Oyj's earnings over the next few years are expected to increase by 28%, 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 SIILI’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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on SIILI, now may not be the most advantageous 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 Siili Solutions Oyj at this point in time. Every company has risks, and we've spotted 3 warning signs for Siili Solutions Oyj you should know about.

If you are no longer interested in Siili Solutions 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. 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.
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