When Should You Buy Hanwha Solutions Corporation (KRX:009830)?

Hanwha Solutions Corporation (KRX:009830), 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. 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, what if the stock is still a bargain? Let’s take a look at Hanwha Solutions’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Hanwha Solutions

What's the opportunity in Hanwha Solutions?

The stock is currently trading at ₩50,400 on the share market, which means it is overvalued by 24% compared to my intrinsic value of ₩40533.04. This means that the opportunity to buy Hanwha Solutions at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Hanwha Solutions’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.

Can we expect growth from Hanwha Solutions?

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. With revenues expected to grow by a double-digit 16% over the next couple of years, the outlook is positive for Hanwha Solutions. 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? A009830’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe A009830 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 A009830 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 optimistic prospect is encouraging for A009830, which means it’s worth diving deeper into other factors 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 Hanwha Solutions at this point in time. In terms of investment risks, we've identified 1 warning sign with Hanwha Solutions, and understanding it should be part of your investment process.

If you are no longer interested in Hanwha Solutions, 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. 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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