When Should You Buy Husqvarna AB (publ) (STO:HUSQ B)?

Husqvarna AB (publ) (STO:HUSQ B), might not be a large cap stock, but it saw a significant share price rise of 21% in the past couple of months on the OM. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. 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. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Husqvarna’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Husqvarna

What Is Husqvarna Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 3.25% above our intrinsic value, which means if you buy Husqvarna today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth SEK81.13, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Husqvarna’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Husqvarna generate?

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. With profit expected to more than double over the next couple of years, the future seems bright for Husqvarna. 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? HUSQ B’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 an eye on HUSQ B, 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.

If you want to dive deeper into Husqvarna, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Husqvarna has 4 warning signs and it would be unwise to ignore these.

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.

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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.