Is It Too Late To Consider Buying Masterplast Nyrt. (BUSE:MASTERPLAST)?

Masterplast Nyrt. (BUSE:MASTERPLAST), is not the largest company out there, but it saw a significant share price rise of over 20% in the past couple of months on the BUSE. 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 Masterplast Nyrt’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Masterplast Nyrt

What is Masterplast Nyrt worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 1.82% above my intrinsic value, which means if you buy Masterplast Nyrt today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth HUF3172.26, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Masterplast Nyrt’s low beta implies that the stock is less volatile than the wider market.

What does the future of Masterplast Nyrt look like?

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. In Masterplast Nyrt's case, its revenues over the next few years are expected to grow by 55%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth 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 MASTERPLAST’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 MASTERPLAST, 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.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Every company has risks, and we've spotted 3 warning signs for Masterplast Nyrt (of which 1 is significant!) you should know about.

If you are no longer interested in Masterplast Nyrt, 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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