Is Now The Time To Look At Buying Husqvarna AB (publ) (STO:HUSQ B)?

Husqvarna AB (publ) (STO:HUSQ B), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the OM over the last few months. 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. But what if there is still an opportunity to buy? Let’s examine Husqvarna’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Husqvarna

What Is Husqvarna Worth?

Good news, investors! Husqvarna is still a bargain right now. According to my valuation, the intrinsic value for the stock is SEK116.23, but it is currently trading at kr75.82 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Husqvarna’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of Husqvarna 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. 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. Though in the case of Husqvarna, it is expected to deliver a relatively unexciting earnings growth of 6.6%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since HUSQ B 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 HUSQ B for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy HUSQ B. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

So while earnings quality is important, it's equally important to consider the risks facing Husqvarna at this point in time. For instance, we've identified 3 warning signs for Husqvarna (2 are significant) you should be familiar with.

If you are no longer interested in Husqvarna, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.