Komplett Bank ASA (OB:KOMP), operating in the financial services industry based in Norway, received a lot of attention from a substantial price movement on the OB over the last few months, increasing to NOK13.42 at one point, and dropping to the lows of NOK11.88. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Komplett Bank’s current trading price of NOK12.5 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Komplett Bank’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is Komplett Bank worth?The stock seems fairly valued at the moment according to my relative valuation model. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Komplett Bank’s ratio of 6.53x is trading slightly below its industry peers’ ratio of 9.18x, which means if you buy Komplett Bank today, you’d be paying a fair price for it. And if you believe that Komplett Bank should be trading at this level in the long run, then there’s not much of an upside to gain from mispricing. In addition to this, it seems like Komplett Bank’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will Komplett Bank 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 revenue expected to more than double in the next few years, the future appears to be extremely bright for Komplett Bank. If expenses can also 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? It seems like the market has already priced in KOMP’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 financial strength of the company. Have these factors changed since the last time you looked at KOMP? Will you have enough conviction to buy should the price fluctuate below the true value?
Are you a potential investor? If you’ve been keeping an eye on KOMP, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic forecast is encouraging for KOMP, 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Komplett Bank. You can find everything you need to know about Komplett Bank in the latest infographic research report. If you are no longer interested in Komplett Bank, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.