Norwegian Finans Holding ASA (OB:NOFI) is considered a high growth stock. However its last closing price of NOK92 left investors wondering whether this growth has already been factored into the share price. Let’s take a look at some key metrics to determine whether there’s any value here for current and potential future investors. Check out our latest analysis for Norwegian Finans Holding
Should you get excited about NOFI’s future?According to the analysts covering the company, the following few years should bring about good growth prospects for Norwegian Finans Holding. Expectations from 4 analysts are certainly positive with earnings forecasted to rise significantly from today’s level of NOK8.6 to NOK12.989 over the next three years. This indicates an estimated earnings growth rate of 13.75% per year, on average, which indicates a solid future in the near term.
Can NOFI’s share price be justified by its earnings growth?
Norwegian Finans Holding is available at a price-to-earnings ratio of 10.7x, showing us it is undervalued relative to the current NO market average of 13.06x , and overvalued based on current earnings compared to the banks industry average of 10.06x .
We already know that NOFI appears to be overvalued when compared to its industry average. However, seeing as Norwegian Finans Holding is perceived as a high-growth stock, we must also account for its earnings growth, which is captured in the PEG ratio. A PE ratio of 10.7x and expected year-on-year earnings growth of 13.75% give Norwegian Finans Holding a very low PEG ratio of 0.78x. Based on this growth, Norwegian Finans Holding’s stock can be considered relatively cheap , based on the fundamentals.
What this means for you:
NOFI’s current undervaluation could signal a potential buying opportunity to increase your exposure to the stock, or it you’re a potential investor, now may be the right time to buy. However, basing your investment decision off one metric alone is certainly not sufficient. There are many things I have not taken into account in this article and the PEG ratio is very one-dimensional. If you have not done so already, I urge you to complete your research by taking a look at the following:
- Financial Health: Is NOFI’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Past Track Record: Has NOFI been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of NOFI’s historicals for more clarity.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.