Pareto Bank ASA (OB:PARB), operating in the financial services industry based in Norway, had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of NOK36.6 to NOK40. However, is this the true valuation level of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Pareto Bank’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for Pareto Bank
What is Pareto Bank worth?Good news, investors! Pareto Bank is still a bargain right now. My valuation model shows that the intrinsic value for the stock is NOK84.09, but it is currently trading at ØRE39.50 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Pareto Bank’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
What does the future of Pareto Bank look like?Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. However, with a relatively muted profit growth of 4.27% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Pareto Bank, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since PARB is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on PARB for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy PARB. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Pareto Bank. You can find everything you need to know about Pareto Bank in the latest infographic research report. If you are no longer interested in Pareto Bank, you can use our free platform to see my list of over 50 other stocks with a high growth potential.