Should You Investigate SCREEN Holdings Co., Ltd. (TSE:7735) At JP¥10,690?

SCREEN Holdings Co., Ltd. (TSE:7735), is not the largest company out there, but it saw a significant share price rise of 35% in the past couple of months on the TSE. 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 mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today we will analyse the most recent data on SCREEN Holdings’s outlook and valuation to see if the opportunity still exists.

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What Is SCREEN Holdings Worth?

Great news for investors – SCREEN Holdings is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is ¥14975.58, but it is currently trading at JP¥10,690 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, SCREEN Holdings’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

View our latest analysis for SCREEN Holdings

What does the future of SCREEN Holdings 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. However, with a relatively muted profit growth of 7.5% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for SCREEN Holdings, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since 7735 is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on 7735 for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 7735. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example, SCREEN Holdings has 3 warning signs (and 1 which is a bit concerning) we think you should know about.

If you are no longer interested in SCREEN 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.