When Should You Buy Inox Wind Limited (NSE:INOXWIND)?

Inox Wind Limited (NSE:INOXWIND), is not the largest company out there, but it led the NSEI gainers with a relatively large price hike in the past couple of weeks. The company is now trading at yearly-high levels following the recent surge in its share price. As a ₹172b market-cap stock, it seems odd Inox Wind is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Let’s take a look at Inox Wind’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Inox Wind

What's The Opportunity In Inox Wind?

According to our valuation model, Inox Wind seems to be fairly priced at around 9.8% below our intrinsic value, which means if you buy Inox Wind today, you’d be paying a fair price for it. And if you believe that the stock is really worth ₹586.40, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Inox Wind’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Inox Wind?

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. In Inox Wind's case, its revenues over the next couple of years are expected to double, indicating an incredibly 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 INOXWIND’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 INOXWIND, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. At Simply Wall St, we found 2 warning signs for Inox Wind and we think they deserve your attention.

If you are no longer interested in Inox Wind, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.