Why Multiconsult ASA (OB:MULTI) Could Be Worth Watching

While Multiconsult ASA (OB:MULTI) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the OB over the last few months. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine Multiconsult’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Multiconsult

What's The Opportunity In Multiconsult?

According to my valuation model, Multiconsult seems to be fairly priced at around 13.45% above my intrinsic value, which means if you buy Multiconsult today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth NOK117.24, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Multiconsult’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of Multiconsult look like?

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 profit expected to grow by a double-digit 12% over the next couple of years, the outlook is positive for Multiconsult. 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? MULTI’s optimistic future growth appears to have been factored into the current share price, 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 the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on MULTI, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, 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.

So while earnings quality is important, it's equally important to consider the risks facing Multiconsult at this point in time. You'd be interested to know, that we found 2 warning signs for Multiconsult and you'll want to know about these.

If you are no longer interested in Multiconsult, 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.