At HK$17.52, Is Geely Automobile Holdings Limited (HKG:175) Worth Looking At Closely?

Geely Automobile Holdings Limited (HKG:175) received a lot of attention from a substantial price increase on the SEHK over the last few months. While good news for shareholders, the company has traded much higher in the past year. 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? Let’s take a look at Geely Automobile Holdings’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Geely Automobile Holdings

Is Geely Automobile Holdings Still Cheap?

Good news, investors! Geely Automobile Holdings is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is HK$22.57, but it is currently trading at HK$17.52 on the share market, meaning that there is still an opportunity to buy now. However, given that Geely Automobile Holdings’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Geely Automobile Holdings look like?

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. Geely Automobile Holdings' earnings over the next few years are expected to increase by 20%, 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? Since 175 is currently undervalued, it may be a great time to accumulate more of 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 financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on 175 for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 175. 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 Geely Automobile Holdings as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Geely Automobile Holdings has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in Geely Automobile Holdings, 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.