What Is TCL Electronics Holdings Limited's (HKG:1070) Share Price Doing?

TCL Electronics Holdings Limited (HKG:1070), is not the largest company out there, but it saw a significant share price rise of 30% in the past couple of months on the SEHK. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. 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 examine TCL Electronics Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for TCL Electronics Holdings

What Is TCL Electronics Holdings Worth?

According to our valuation model, TCL Electronics Holdings seems to be fairly priced at around 19% below our intrinsic value, which means if you buy TCL Electronics Holdings today, you’d be paying a fair price for it. And if you believe the company’s true value is HK$3.51, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, TCL Electronics Holdings’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will TCL Electronics Holdings generate?

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. 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. Though in the case of TCL Electronics Holdings, it is expected to deliver a relatively unexciting earnings growth of 3.3%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for TCL Electronics Holdings, at least in the near term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in 1070’s future outlook, with shares trading around its fair value. 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 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 an eye on 1070, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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 TCL Electronics Holdings, you'd also look into what risks it is currently facing. Case in point: We've spotted 2 warning signs for TCL Electronics Holdings you should be mindful of and 1 of them doesn't sit too well with us.

If you are no longer interested in TCL Electronics 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.