Is Now An Opportune Moment To Examine Triumph New Energy Company Limited (HKG:1108)?

Triumph New Energy Company Limited (HKG:1108), is not the largest company out there, but it saw significant share price movement during recent months on the SEHK, rising to highs of HK$6.99 and falling to the lows of HK$4.60. 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 Triumph New Energy's current trading price of HK$4.60 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 Triumph New Energy’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 Triumph New Energy

What Is Triumph New Energy Worth?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Triumph New Energy’s ratio of 9.52x is trading slightly below its industry peers’ ratio of 10.04x, which means if you buy Triumph New Energy today, you’d be paying a decent price for it. And if you believe Triumph New Energy should be trading in this range, then there isn’t much room for the share price to grow beyond the levels of other industry peers over the long-term. So, is there another chance to buy low in the future? Given that Triumph New Energy’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 Triumph New Energy?

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. Triumph New Energy's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger 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 1108’s positive outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at 1108? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you’ve been keeping tabs on 1108, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for 1108, 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 want to dive deeper into Triumph New Energy, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Triumph New Energy has 2 warning signs and it would be unwise to ignore these.

If you are no longer interested in Triumph New Energy, 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.