What Is OMRON Corporation's (TSE:6645) Share Price Doing?

While OMRON Corporation (TSE:6645) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the TSE. While good news for shareholders, the company has traded much higher in the past year. 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. However, could the stock still be trading at a relatively cheap price? Let’s take a look at OMRON’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for OMRON

What's The Opportunity In OMRON?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 9.03% above our intrinsic value, which means if you buy OMRON today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is ¥4874.92, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, OMRON’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will OMRON generate?

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. With revenues expected to grow by a double-digit 18% over the next couple of years, the outlook is positive for OMRON. If the level of expenses is able to be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? 6645’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. 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 tabs on 6645, 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.

If you want to dive deeper into OMRON, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 1 warning sign for OMRON you should know about.

If you are no longer interested in OMRON, 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.