Why Dexerials Corporation (TSE:4980) Could Be Worth Watching

Dexerials Corporation (TSE:4980), is not the largest company out there, but it saw a decent share price growth of 13% on the TSE over the last few months. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today we will analyse the most recent data on Dexerials’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Dexerials

Is Dexerials Still Cheap?

According to our valuation model, the stock is currently overvalued by about 20%, trading at JP¥5,930 compared to our intrinsic value of ¥4941.29. Not the best news for investors looking to buy! Furthermore, Dexerials’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What does the future of Dexerials 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. Dexerials' earnings over the next few years are expected to increase by 30%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in 4980’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe 4980 should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on 4980 for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for 4980, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Dexerials, you'd also look into what risks it is currently facing. At Simply Wall St, we found 3 warning signs for Dexerials and we think they deserve your attention.

If you are no longer interested in Dexerials, 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.