What Is Hankook Tire & Technology Co., Ltd.'s (KRX:161390) Share Price Doing?

Hankook Tire & Technology Co., Ltd. (KRX:161390), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the KOSE. 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, could the stock still be trading at a relatively cheap price? Let’s examine Hankook Tire & Technology’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Hankook Tire & Technology

Is Hankook Tire & Technology still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 8.4% below my intrinsic value, which means if you buy Hankook Tire & Technology today, you’d be paying a reasonable price for it. And if you believe the company’s true value is ₩40788.91, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Hankook Tire & Technology’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will Hankook Tire & Technology 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. Hankook Tire & Technology's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This 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 A161390’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 track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on A161390, 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Hankook Tire & Technology at this point in time. At Simply Wall St, we found 2 warning signs for Hankook Tire & Technology and we think they deserve your attention.

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This article by Simply Wall St is general in nature. 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.
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