Is There Now An Opportunity In Sharp Corporation (TSE:6753)?

Sharp Corporation (TSE:6753), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the TSE over the last few months, increasing to JP¥1,007 at one point, and dropping to the lows of JP¥733. 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 Sharp's current trading price of JP¥733 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Sharp’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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What's The Opportunity In Sharp?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 14% below our intrinsic value, which means if you buy Sharp today, you’d be paying a fair price for it. And if you believe that the stock is really worth ¥851.57, then there’s not much of an upside to gain from mispricing. Furthermore, Sharp’s low beta implies that the stock is less volatile than the wider market.

View our latest analysis for Sharp

What does the future of Sharp look like?

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 Sharp, it is expected to deliver a negative revenue growth of -12% over the next couple of years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Currently, 6753 appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on 6753 for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on 6753 should the price fluctuate below its true value.

Diving deeper into the forecasts for Sharp mentioned earlier will help you understand how analysts view the stock going forward. Luckily, you can check out what analysts are forecasting by clicking here .

If you are no longer interested in Sharp, 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.